Rates

2008-02-23 00:00

The implementation of the new legislation on rates, which relates the rateable value of a property to its market value (and draws previously unrated agricultural land into the municipal rates net) was bound to be contentious. There were sure to be anomalies and, with the valuation — and hence the pressure on the landholder’s purse — so much higher, these have been particularly aggravating.

Even under the old system, valuations were often queried. The new assessments are far more complex. The market value of a property is much more than a matter of the size of a plot and the improvements on it, and the determining factors are often difficult to define. Location is often said to be crucial, and ready access to desirable amenities can elevate the market value just as proximity to a noisy highway or a slum can depress it. A quite ordinary house can command a splendid vista, while the beautifully appointed home next door may have no view at all, and so on.

The quality of the fittings and furnishings would certainly be relevant to an estate agent, but many householders have vigorously resisted attempts by the authorities to inspect the interior of their homes. The aesthetics of the fittings and indeed the whole architecture is another consideration where such nebulous factors as personal taste and changing fashions play a significant role and, of all the fluctuations, the shifts in the property market as the interest rate rises or falls can be critical. There is some irony in the realisation that in many municipalities the valuations were done when the market was booming, while the implementation of the new system coincides with a slump.

Linking rateable value to market value creates another paradox: owners would, of course, like the market value of their property to be as high as possible, while the valuation for rates should be as low as possible. This will explain a good deal of the current unhappiness. Also unhappy, and with good reason, are the owners of agricultural land, previously not liable for rates and still not receiving the municipal services for which rates are ostensibly due. This last point is telling. The new legislation is not just a technical adjustment of the basis on which rates are paid; it actually changes the whole nature of rates, from a tariff for services rendered to a new tax on land.

Ratepayers can legitimately expect two things; first that the municipal authorities should give due heed to their objections, many of which will be valid, and secondly that the money raised will be used appropriately. Regarding the first, there have been instances where municipalities have imposed huge increases and treated their ratepayers’ complaints with arrogant dismissiveness. The Msunduzi Municipality has set a much better example, inviting people to come forward and lodge objections so that discrepancies can be sorted out. For the second, the need to raise additional revenue for the social upliftment of neglected communities can be understood, but there have been too many instances of financial mismanagement and sheer wastefulness. Ratepayers must now demand not only more effective services but all-round better management by their councils.

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