Rates increases could turn Newcastle into a ‘ghost town’

Angry residents protest recent rate increases after a valuation roll. Image: Newcastle Advertiser

Property owners can still appeal the outcome of the objections, which will be escalated to court, after residents vehemently rejected municipal rate increases.

Properties must be valued every five years, according to the Municipal Property Rates Act (MPRA), which legislates how the valuation process is carried out.

Once valuations were completed, Cllr Mahlaba encouraged residents to look at the valuations roll during the state of the town address and during the budget roadshows.

Anticipating an increase in property values, which meant residents would pay more for rates anyway, Newcastle Municipality decided it would not increase the annual tariff for rates this year, reports Newcastle Advertiser.

Furthermore, the municipality increased the impermissible property value from R15,000 to R85,000. What this means is that property owners are now being charged rates for up to R85,000 of their property value. If your property is valued at R500,000, for example, your monthly rates are only calculated on R415,000 (ie R500,000 minus the R85,000, which is impermissible).

“As [the] municipality, that is all we could do to buffer the increases for residents. We can’t interfere with the valuations process. That is out of our hands.

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“However, just because the property valuation company is registered and experienced, does not mean they do not make mistakes. That is why I have been encouraging residents to look at the valuation roll and lodge an appeal if they disagree with how their property has been valued,” said Cllr Mahlaba, who has lodged three appeals himself, with regards to properties he owns in Newcastle.

“I am not happy with the increases myself. However, once the objections period closed, we found many people had not lodged an appeal, so we started to encourage them to lodge a query.”

A businessman at the meeting complained: “How can the valuations company justify such high increases on properties that have not been developed? It has become painful to do business in Newcastle. It has become almost impossible to continue.

“The municipality should have advised the valuations company to consider the economic climate when assessing the properties in Newcastle. Many businesses have closed. When it received the valuation roll, the municipality should have taken some action then to have it rectified, not just for those who objected.”

Peet Liebenberg of AfriForum said: “There are far more people who have not had the foresight to do something about it themselves. The town is suffering. How can the municipality just stand back and say ‘There is nothing we can do’?

Founder of NACA, Solly Maharaj added: “Business is the heart of Newcastle and the rates issue is causing businesses to close at an alarming rate. I have heard eight factories have closed, and 19 houses have been abandoned. Landlords are passing on the burden of increased rates to the tenants and tenants are moving out because they can’t afford it.”

In reply, Cllr Mahlaba cautioned: “I cannot just tell you what you want to hear. I have to tell you the truth.”

The municipality expected feedback on the first batch of objections in two weeks, and all the objections were expected to be finalised by the end of October.

Property owners can still appeal the outcome of the objections.

However, the appeals would be escalated to court, where a judge would make a determination on whether the property value was a fair representation of the market price of the property or not.

Cllr Mahlaba agreed to have staff available on weekends in order to accommodate residents who could not make it to the municipality during office hours, due to work and other commitments.

He also agreed to arrange for staff to visit wards to collect queries, to make it easier for residents who have transport difficulties.

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