The much-awaited Property Rates Bill, which broadly introduces the concept of a market value based municipal rating system in South Africa, has been tabled in Parliament.

The Bill - which will be piloted by Provincial and Local Government Minister Sydney Mufamadi - provides for the criteria in terms of which property must be valued.

It must be valued according to market value - defined as the amount the property would realise if sold in the open market by a willing seller to a willing buyer.

The techniques that may be used must accord with generally recognised valuation practices, methods and standards, says the memorandum to the Bill. Significantly in the case of sectional title schemes - which apply to flats (apartments) - each sectional title unit must be separately valued.

The general principle is that the owner of a property must pay the rates on the property. Joint owners are jointly and severally liable for rates, but in the case of a sectional title scheme the owner of each sectional title unit must pay the rate on the unit. The body corporate in sectional schemes would no longer be responsible for collection and payment of rates.

To discourage unreasonable hikes in property rates, the minister - acting with the concurrence of the finance minister - is empowered to set a limit by notice in the government gazette on the percentage by which rates on property may be increased annually.

It also provides for the phasing in of rates on newly rateable property or on a property of which the owner is a land reform beneficiary.

I-Net Bridge