Property Rates Relief following damage caused by recent unrest
The recent unrest in the eThekwini Municipality (the Municipality) and elsewhere in KwaZulu-Natal and the country, resulted in significant and widespread damage to buildings and other structures. Property owners who have suffered damage will no doubt be lodging insurance claims for compensation, with SASRIA. Such owners should also carefully consider opportunities which exist to reduce liability for property rates and obtain some financial reprieve.
The rates policy of the Municipality for the 2020/2021 years (Rates Policy) makes provision for properties to be re-valued following damage by natural disaster (paragraph 7.11.1) as contemplated in the Disaster Management Act, 2002 (Disaster Act), as well as through causes (paragraph 7.11.2) other than those defined in the Disaster Act (Non Natural Causes) where such damage renders the property uninhabitable. On application in respect of Non Natural Causes, the Municipality may grant a 6 months temporary rates rebate from the date of the damage, on condition that an application is made within 60 days from the date of such occurrence.
On application, the Municipality may also grant a further extension of the temporary rebate in respect of damage caused by reason other than natural disaster. The applicant must apply no later than 45 days prior to the expiry of the 6 month period and any further period will be subject to the further rebate period determined by Council at its annual budget meeting, which period shall not exceed 2 years.
The Municipality adopted a resolution on 27 May 2021 titled ‘Promulgation of Resolution Levying Rates’ published in the Provincial Gazette of 1 July 2021 (Rates Resolution) in conformity with the provisions of section 14 of the Local Government: Municipal Property Rates Act of 2004 (Rates Act). The Rates Resolution, required by the Rates Policy, specifies the rate randages levied on different categories of property within the Municipality for the current rates year, and deals with exemptions, rebates and reductions covering various circumstances.
The Rates Resolution provides that the Municipality may grant a temporary rebate of 75% in respect of property damaged by Non Natural Causes, which would include damage caused by the unrest. A further temporary rebate of 75% may be granted, on application, for a period not exceeding 6 months, provided application is made within 45 days prior to expiry of the 6 months period.
Applicants who wish to avail themselves of the rebates in respect of damage caused by the unrest, must complete a “Rebate Application Disaster Relief” form Rev19/21 (attached), setting out details of the applicant, the nature of the application and details of the disaster, as well as a declaration which needs to be signed before a commissioner of oaths.
Applicants should ensure that all the relevant supporting documents are submitted with the application, including an assessor’s loss report, photographs of the incident, recent municipal accounts and other identification and representation documents. The applicant must also provide particulars of the extent of the damage.
Another option for property owners seeking relief from property rates is to lodge an objection to the valuation of a damaged or destroyed property with the Municipality. A Municipality is obliged in terms of the Rates Act to regularly, and at least once a year, to update its valuation roll. Where changes do not affect value, such as a change in ownership, the roll may simply be amended. Where changes comprise a change in value or the addition of a property to the roll, a supplementary roll must be prepared and published. Section 78 of the Rates Act provides that a Municipality must obtain a supplementary valuation in respect of properties in various circumstances, one of which is if the market value of a property has been substantially increased or decreased for any reason since the last general valuation. The current third General Valuation (GV2017) came into effect from 1 July 2017, and will apply until 30 June 2022 when a new general valuation will be required.
Applicants can lodge an objection to the value of a property by completing and handing in the prescribed form together with any information the applicant has in support of the objection. The form for lodging of an objection can be obtained from: Valuation Roll, Real Estate Unit, 5th Floor, 199 Anton Lembede, Durban or at the Sizakala Customer Centres and is also available for download from the Municipality website or pdf.
If a property is substantially damaged, and the owner has elected not to immediately rebuild, then it is probably more appropriate that the owner applies for a re-valuation of the property, and if approved, a supplementary roll will be published by the Municipality reflecting an updated, lower value. If the owner intends rather to rebuild, it would be more appropriate for the owner to apply for the special rebate contemplated in the Rates Policy and the Rates Resolution, which achieves a rates reprieve on a temporary basis during reconstruction of the buildings.