Many people confuse the difference
between zoning and different categories of rateable property imposed by the
Municipality for rating purposes based on the way in which the property is
used.
A property zoning is a list of rights
that dictate what uses the property can legally be put to. A property zoning is determined by the
applicable town planning scheme and the best way to find out what zoning you
have for your property is to secure a zoning certificate from your
Municipality.
However, the Municipality may in Terms
of Section 8 of the Local Government Municipal Property Rates Act No. 6 of 2004
determine categories of rateable property within their jurisdiction to
determine how rates should be calculated.
Municipalities must for example, describe
properties as residential, industrial, business/commercial, agricultural,
mining, properties owned by an organ of state and used for public services,
public service infrastructure properties, properties used for public benefit
organisations and use for public benefit activities, properties used for multiple
purposes. The latter category is
interesting because you may, for example, own a farm but on the farm, you have guest
house activity and in addition to that you have a farm store. So, the Municipality may determine different
rates on your property depending on how you use the property. Even though your
farm is zoned as an agricultural property they may still charge rates on a
commercial basis for those portions used for commercial activity because you
are using parts of your farm for commercial reasons.
Strangely
enough, if your property is used for an unlawful purpose (e.g., a guest house
on a farm) the Municipality may charge you rates for that unlawful use, but it
does not make the use legal from a zoning point of view (in other words, do not
assume that just because you are paying rates on a guest house it means that
the operation of the guest house is lawful).
Many rural properties are often rated
by Municipalities as residential properties because they are not in fact used
as agricultural properties but as “lifestyle” properties. The practice tends to be to ask for
registration with SARS as proof that you are earning income from the property
as an agricultural property.
Regarding zoning, one should refer to
the Spatial Plan and Land Use Management Act, 16 of 2013 together with what is
known as the SPLUMA Regulations. At local Government level one usually has a
By-Law dealing with Municipal Land Use Planning which is an important source
document.
Unfortunately, we have seen that some
purchasers of property rely on the rating categories imposed by the
Municipality to form the conclusion that their property is zoned for a
particular use which is not applicable to that property. Great care should be taken to find out what
the true zoning is of the property and what the different rateable categories
are.
In addition, you should find out what
the Municipal valuation is of your property.
If you are dissatisfied, you may lodge an objection when the time is
right to do so and prove the correct market value of the property. The Municipality will advertise the Valuation
roll and give you an opportunity to comment. It is always a good idea to
appoint an estate agent or a valuer to assist you to value your property
correctly as this will make sure that the rates that you pay are correct and in
accordance with the value and the use of the property.