MOSSEL BAY NEWS - What is the Municipal Property Rates Act? The Municipal Property Rates Act is a national law that regulates the power of a municipality to value and rate immovable properties, being land and buildings located within the boundaries of municipalities.

How is the market value of the property determined?

• The market value of the immovable property is the amount the property would have realised if sold in the open market by a willing seller to a willing buyer.
• To protect immovable property owners, the law requires municipalities to employ the services of professional valuers who are registered as valuers in terms of the Property Valuers Profession Act, 2000 (Act No.47 of 2000).
• These valuers know how to value immovable properties which have not yet been sold in terms of the principle of “willing seller to a willing buyer”, and they are well trained to ensure that all properties are valued fairly and objectively.

What are municipal property rates?

• Municipal property rates are the financial liabilities that each immovable property owner pays to the municipality where his/her immovable property (land and buildings) is located.
•  The financial liabilities for property rates are calculated by multiplying the market value of immovable property (land plus buildings) by a Cent amount in the Rand that a municipal council has determined.

What is municipal property rates revenue used for?

• Municipalities need a reliable source of revenue to provide basic services and perform their functions. Property rates are the most important source of general revenue for municipalities, especially in developed areas.
• Revenue from property rates is used to fund services that benefit the community as a whole as opposed to individual households. These include:

- Installing and maintaining streets, roads, sidewalks, lighting, and storm drainage facilities; and

- Building and operating clinics, parks, recreational facilities and cemeteries.

- Property rates revenue is also used to fund municipal administration, such as computer equipment and stationery, and costs of governance, such as council and community meetings, which facilitate community participation on issues of Integrated Development Plans (IDPs) and municipal budgets.

What is the Date of Valuation?

1. For the purposes of a general valuation, a municipality must determine a date that may not be more than 12 months before the start of the financial year in which the valuation roll is to be first implemented.

2. The general valuation must reflect the market value of properties determined in accordance with:

(a) market conditions which applied as at the date of valuation; and

(b) any other applicable provisions of this Act.

For how long is a valuation roll valid?

A valuation roll remains valid for that financial year or for one or more subsequent financial years, as the municipality may decide, but in total not for more than:

(i) four financial years with respect to a metropolitan municipality; and

(ii) five financial years with respect to a local municipality.

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