Trust wins rates battle

2012-06-05 00:00

A SUPREME Court of Appeal (SCA) ruling that Ingonyama Trust owns land qualified as state land and is therefore exempt from paying rates to eThekwini Municipality from 1998 to 2005 will have far-reaching implications for local authorities and ratepayers.

This is the view of the chairperson of the Ingonyama Trust Board, Judge Jerome Ngwenya, who welcomed the outcome of the SCA ruling yesterday, but said it was not the end of the matter for the trust.

The SCA on Friday upheld the trust’s appeal against an earlier finding by Durban high court Judge Shyam Gyanda that it was not exempt from paying rates under the Rating of State Property Act of 1984.

The board is the landowner-in-law of some 2,7 million hectares in KwaZulu Natal.

The SCA judgment relieves the trust of liability for rates up to 2005, when the Rating of State Property Act of 1984 was repealed, and translates into a saving for the Ingonyama Trust — and conversely a loss to the eThekwini Municipality — of millions of rands.

Ngwenya said the ruling had “ushered in a new era” and the Ingonyama Trust Board plans to sit down with local authorities to discuss the rating of trust land under the current Municipal Properties Rates Act.

He said the trust could not pay rates on behalf of citizens who reside on trust land simply because they lived there, and should be liable only for unoccupied portions of land.

Otherwise a person could build a mansion on the land and the trust would be held liable for the rates.

There also remained a gap between July 2005, when the Rating of State Property Act was repealed, and 2008 when the new legislation was promulgated.

Ngwenya said the implications of the SCA ruling were “huge” in that all government properties in the country could claim exemption, and individuals who had been paying rates might have to claim a refund for the time that the act was in operation.

“Monies paid could amount to billions. eThekwini alone at the time of going to court was suggesting [although this figure was never formally presented to Ingonyama Trust] that the trust was owing about R600 million.

Ulundi Municipality at one stage was claiming R10 million. It is an open secret that many local authorities have been waiting in the wings with huge bills,” he said in a written statement.

Pete du Plessis of the treasury department at eThekwini Municipality said the municipality needed time to study and discuss the implications of the SCA judgment before making any comment.

• ingrido@witness.co.za

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