Property Valuation

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 2008.

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 1 July 2007.

While providing uniformity and simplicity, the Municipal Property Rates Act aims to undo historical imbalances and relieve the rates burden on the poor.

Property Rates

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.