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  • NELSON MANDELA BAY

    METROPOLITAN MUNICIPALITY

    2015/2016 PROPERTY RATES POLICY

    Adopted by Council on

  • TABLE OF CONTENTS

    Page No.

    PART 1 INTRODUCTION AND BACKGROUND 1 PART 2 DEFINITIONS 1 PART 3 GUIDING PRINCIPLES 6 PART 4 IMPOSITION OF RATES 6 PART 5 CATEGORIES OF PROPERTIES AND OWNERS 6 PART 6 CRITERIA FOR CATEGORISING AND RATING PROPERTIES USED MULTIPLE PURPOSES 7 PART 7 MUNICIPAL OWNED PROPERTIES 7 PART 8 SPECIAL RATING AREAS 8 PART 9 EXEMPTIONS, REBATES, AND REDUCTIONS 8 PART 10 AMOUNT DUE FOR RATES 12 PART 11 FREQUENCY OF PAYMENTS 12 PART 12 FREQUENCY OF VALUATIONS 12 PART 13 EFFECTIVE DATE OF RATES POLICY 12 PART 14 ANNUAL REVIEW OF RATES POLICY 12 PART 15 LEGAL REQUIREMENTS 12 PART 16 TRANSITIONAL ARRANGEMENTS 13 ANNEXURE A 14

  • -1-

    PART 1: INTRODUCTION AND BACKGROUND [1] In terms of Section 229 of the Constitution of the Republic of South Africa, Act No 108 of

    1996, a municipality may impose rates on property. [2] In terms of Section 4(1)(c) of the Local Government: Municipal Systems Act, No. 32 of

    2000, a municipality has the right to finance the affairs of the municipality by imposing, inter alia, rates on property.

    [3] In terms of Section 2(1) of the Local Government: Municipal Property Rates Act, No. 6 of

    2004 (MPRA), a metropolitan or local municipality may levy a rate on property in its area of jurisdiction in accordance with the provisions of the MPRA.

    [4] The Nelson Mandela Bay Metropolitan Municipality (the Municipality) is one of eight

    metropolitan municipalities in South Africa that exercise full executive and legislative authority over their respective areas of jurisdiction. The Council of the Municipality has elected to impose a rate in terms of the aforementioned legislation. Consequently, this rates policy has been developed within the parameters of the applicable legislation relating to property rates.

    [5] This Property Rates Policy (the Policy) only applies to the rating of property valued in

    accordance with the MPRA and the applicable regulations; it does not regulate the process of property valuation and the approval of the valuation roll, which is governed by the MPRA.

    [6] The proposed property rates are to be levied in accordance with existing Council policies,

    the Local Government: Municipal Property Rates Act and the Local Government Municipal Finance Management Act. Property rates are levied as an amount in the rand based on the property value contained in the Nelson Mandela Bay Metropolitan Municipalitys (NMBMM) Valuation Roll.

    [7] In terms of Section 8 of the Local Government: Municipal Property Rates Act, the

    Municipality has chosen to differentiate between various categories of property and owners of property. The various categories of properties and owners are defined under Part 2 of this Policy.

    [8] Rebates and concessions will be granted to certain categories of property usage or certain

    property owners. The Municipality does not grant relief in lieu of the payment of rates to any category of owners or properties, or to owners of properties on an individual basis, other than by way of an exemption, rebate or reduction as provided for in the rates policy.

    [9] Methodology used to determine rates ratios is contained in Annexure A of this Policy. PART 2: DEFINITIONS [10] In addition to the definitions provided in the MPRA, the following definitions apply for the

    purposes of the application of the Policy:

    Agricultural purposes refers to the use of an area of land of any size, including the various structures thereon, devoted primarily to the practice of producing and managing produce, grains, livestock or forestry products. The agricultural activity must be intense, must not be a mere hobby and must contribute to the local economy. Property used for agricultural purposes may be owned and operated by a single individual, family, community, trust or corporate entity; categories of property means the categories recognized in terms of section [17] of this policy, i.e.:

  • -2-

    (i) agricultural property refers to property that is used primarily for agricultural purposes but, without derogating from section 9 of the MPRA, excludes any portion thereof that is used commercially for the hospitably of guests, and excludes the use of the property for the use of the property for the purpose of eco-tourism or for the trading in or hunting of game;

    (ii) business and commercial property refers to property on which the activity of

    buying, selling or trading in goods and/or services and any other commercial activity occurs and a property used for the purpose of eco-tourism or for the trading in or hunting of game, but excludes a property categorised as multiple purpose property: residential, multiple purpose property: residential-other or multiple purpose property: other. It includes any office or other accommodation on the same erf, the use of which is incidental to the business. Further includes, hostels, flats, communes, old age homes, self-catering/holiday flats, residential property on which there are more than two dwellings, any vacant property which is being used for storage or parking which is in line with the zoning of the property and any property used for a purpose which does not fall within any other category defined in this policy;

    (iii) industrial property refers to property on which a trade or manufacturing,

    production assembling or the processing of finished or partially finished products from raw materials or fabricated parts occurs on such a large scale that capital and labour are significantly involved. This includes factories and any office or other accommodation on the same property, the use of which is incidental to the use of such factory;

    (iv) mining property refers to a property used for mining operations as defined in the

    Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002); and used for any operations or activity for the purpose of extracting any mineral on, in or under the earth, water or any mineral residue deposit, whether by underground or open working or otherwise and includes any operation or activity incidental thereto;

    (v) multiple purpose property: residential refers to residential property occupied by

    the owner as his/her primary residence of which a component of the property is used for any commercial or other use;

    (vi) multiple purpose property: residential-other refers to residential property

    occupied by the owner as his/her primary residence, consisting of a dwelling which has been altered and/or other buildings constructed on the property, which is used for any commercial or other use;

    (vii) multiple purpose property: other refers to property utilised for more than one

    use, excluding multiple purpose property: residential and multiple purpose property: residential-other;

    (viii) property used for multiple purpose refers to property utilised for more than one

    use; (ix) public benefit organisation property means property owned by public benefit

    organisations and used for any specified public benefit activity listed in item 1 (welfare and humanitarian), item 2 (health care), item 4 (education and development) of part 1 of the Ninth Schedule to the Income Tax Act; and social housing;

    (x) public service infrastructure property means publicly controlled infrastructure of

    the following kinds:

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    1. national, provincial or other public roads on which goods, services or labour move across a municipal boundary;

    2. water or sewer pipes, ducts or other conduits, dams, water supply reservoirs, water treatment plants or water pumps forming part of a water or sewer scheme serving the public;

    3. power stations, power substations or power lines forming part of an electricity scheme serving the public;

    4. gas or liquid fuel plants or refineries or pipelines for gas or liquid fuels forming part of a scheme for transporting such fuels;

    5. railway lines forming part of a national railway system; 6. communication towers, masts, exchanges or lines forming part of a

    communication system serving the public; 7. runways, aprons and the air traffic control unit at national or provincial airports,

    including the vacant land known as the obstacle free zone surrounding these, which must be vacant for air navigation purposes;

    8. breakwaters, sea walls, channels, basins, quay walls, jetties, roads, railway or infrastructure used for the provision of water, lights, power, sewerage or similar services of ports, or navigational aids comprising lighthouses, radio navigational aids, buoys, beacons or any other device or system used to assist the safe and efficient navigation of vessels;

    9. any other publicly controlled infrastructure as may be prescribed; or 10. rights of way, easements or servitudes in connection with infrastructure

    mentioned in paragraphs (1) to (9).

    (xi) residential property refers to:- 1. a dwelling that is used exclusively for human habitation for residential

    purposes, but excludes hostels, flats, communes, old age homes, self-catering/holiday flats, guesthouses, bed and breakfast establishments, multiple purpose property: residential, multiple purpose property: residential-other and any vacant land irrespective of its zoning or intended usage; or

    2. an improved property with not more than two dwellings, including any adjoining property registered in the name of the same owner and used together with such residential property as if it were one property, used exclusively for human habitation for residential purposes. (Any such groupi

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