The new Municipal Property Rates Act No. 6 of 2004 came into effect on 2 July 2005. This Act regulates the power of a municipality to value and rate immovable properties within its boundaries and must be implemented by all municipalities within four years. The Msunduzi Municipality intends to implement it on 1 July 2009.
The Act provides for the revaluation of all properties within the municipal area. Revaluations should happen at least once every four years and the law states that the rate levied must be based on the market value of the property i.e. the amount the property would have realised if sold on the Date of Valuation in the open market by a willing seller to a willing buyer. The Date of Valuation, as determined by the Msunduzi Municipality, is 2 July 2008. While providing uniformity and simplicity, the Municipal Property Rates Act aims to undo historical imbalances and relieve the rates burden on the poor.
Properties will be revalued and the rates payable by property owners will be based on the updated market value of the property.
Generally, rates increase every year by the rate of inflation. The new system will not necessarily mean that rates will increase, nor does it necessarily mean the municipality will be collecting a larger sum of money. The amount each property owner pays is determined by the market value of his/her property in relation to other properties in the municipal area.
Whilst values will change, the effect on rates of individual properties will only be known once the entire valuation exercise is complete and the rates tariffs have been determined. The revenue received from property rates benefits all ratepayers, and is used to fund essential services, infrastructure costs, health and social needs of communities.
It is essential that communities proactively and constructively engage with the municipality on valuation and rating issues.
Previously, Sectional Title complexes were rated as a whole and the Body Corporate or managing Agent would determine each individual's contribution. In contracts, an important provision of the new Act requires that each individual sectional title unit be separately valued and rated. Again, the rates payable will be based on the market value as at the Date of Valuation.
When exactly will the general valuation of property start?
The general valuation is already underway with information being collected on non-residential properties such as schools, university, public service infrastructure, government owned property etc.
The single residential data collection team, which is responsible for the general valuation, will start visiting house-to-house in February 2007. A more detailed program of the roll-out of this data collection exercise will be made available nearer the time.
Who can I expect to visit my house?
Unless as otherwise arranged with the resident, a data collector will visit your home between 07:30 and 19:00 on any day except Sunday or a public holiday. They will be wearing bibs identifying them with the property valuation project and they will also have an identity card as well as an official letter from the municipality delegating them the authority to collect property data and information. The data collector's name, project ID and a clear photograph of the person will appear on the ID card.
If you are uncertain as to the authenticity of the data collector, you can call the number on the card and printed on the bib to verify that they are authorised to visit your home.
In most cases data collectors will be visiting each neighbourhood road-by-road, individually or in pairs to collect property valuation related information.
What will the data collectors do when they arrive at my house?
The data collector will carry out an internal inspection of all buildings on the property and will measure your house and draw a sketch of it, or confirm the details of a sketch they already have. They will collect data and information to help determine the correct value for the property or sectional title unit.
This will include:
The type of building materials used in the construction of the house.
The quality and condition of the house
The location and situation of the house e.g. on a busy main road, with view etc.
The number of rooms, kitchens and bathrooms
The number and size of other buildings, amenities and facilities e.g. swimming pools, granny flats, garages, stoeps, verandas, patios etc.
The use of buildings e.g. residential, commercial etc.
All of this information will help determine the correct market value of the house. In allowing the data collectors access to your home, you will assist the municipality in determining a fair and equitable market value for your property.
How would I recognise a data collector?
All data collectors will be clearly identifiable as delegated municipal officials of the Msunduzi property valuation project.
A phone number will be published on the data collector's identity card and bib and you can phone that number to verify that the data collector is visiting your property to collect data and information for valuation purposes.
All data collectors are trained by the general valuation project to collect accurate and complete property valuation data and information in a polite and courteous manner.
Do not allow anyone onto your property who claims to be a data collector or valuer but cannot identify themselves to your complete satisfaction. Please call the number supplied to report any suspicious activity or people posing as data collectors. This is in the interest of your safety and the safety of your neighbours.
What are my responsibilities when a data collector wants access to my home?
Data collectors will request access into your home and other buildings on the property to collect information to assist in the valuation process.
If you are not at home when the data collectors visit, they will leave a calling card providing the date and time for the second visit. If this is not suitable, you can contact the data collector to arrange a mutually agreeable date and time.
If they are unable to gain access to your home, the value of your property will be based on available information.
All information noted down by the data collector is confidential and will be treated as such.
What about properties other than homes?
The property valuation project includes the valuation of all non-residential properties such as business premises, factories, sports facilities, schools etc.
These will be valued at the same time as the valuation of residential properties.
What does this mean for rented properties?
Tenants and other occupants are also requested to co-operate in this exercise in providing access to valuers to execute their work properly.
What happens when the market changes?
The Act requires that a revaluation of all properties be done at least once every four years. By undertaking these revaluations, property values will keep up with market trends.
My property has not been the subject of a sale in the past 20 years, how will you value it?
By comparing it against similar properties in the neighbour that have been sold.
Will you need to inspect every property?
For the sake of accuracy, it is desirable that every property is inspected.
How will the common property in sectional title schemes be valued?
The common property generally does not have its own value as this is reflected in the values of individual units.