February 18, 2004

  By Lynda Loxton

Cape Town - Following 320 hours of intensive debate and consultation, the portfolio committee on provincial and local government yesterday breathed a collective sigh of relief as the last technical hurdle to bedding down the controversial Property Rates Bill was passed.

Although the bill was finalised last week, it needed final technical amendments this week.

But the state law adviser who had been husbanding the bill through parliament fell ill on Monday and it seemed as if the deadline of completing legislation three days before it can be debated in parliament would not be met.

But Yunus Carrim, the committee chairman, said emergency steps had been taken to do the necessary final touches and yesterday the assembly adopted a motion waiving the three-day rule.

It will now be debated in the national assembly tomorrow before going to the national council of provinces for the final go-ahead.

Carrim admitted that the bill was "certainly the most technically challenging bill the portfolio committee has had to deal with since 1994".

The bill was drafted against the background of a constitution that gives municipalities the power to levy rates on property and allows for parliament to regulate this power.

The bill allows municipalities, if they want, to extend the levying of rates to properties that have until now been partially or fully excluded from rates.

"This includes the properties of public entities, farmers, religious, welfare and charitable organisations, independent schools, and conservation bodies," Carrim said. 

This was strongly opposed by a wide range of lobby groups, and Carrim said the committee had "to find a balance between the need for municipalities to have adequate revenue to fulfil their major developmental responsibilities and the need to avoid levying rates in a way that debilitates categories of property owners.

"The committee recognises the socially responsible role played by some agencies who are now liable for rates.

"The committee made concessions to them, but with an understanding that it is the national and provincial government, not local government, that must bear the major cost of the role served by these agencies."

Carrim said the new property rates system introduced by the bill would have to be "phased in appropriately through consultation with a range of stakeholders".

The committee considered various models for the valuation of property, including land valuation only, land and improvements at variable rates, land and improvements at a uniform rate and annual rental value.

In the end, it was agreed to adopt a system based on the market value of land and improvements at a uniform rate, which was the trend internationally.

The bill excludes the first R15 000 of all residential properties and 30 percent of the value of public service infrastructure from rates. Land reform beneficiaries are also excluded from rates for 10 years.