The South African Council of Churches (SACC) has called for national legislation regulating property rates to enhance economic justice and to create a favourable environment for all public benefit organisations.

In its submission to the Portfolio Committee on Provincial and Local Government, which is due to consider the Property Rates Bill next week, the SACC strongly endorsed provisions requiring municipal rates policies to treat all persons liable for rates equitably and to take steps to minimise the rates burden on poor households. In keeping with this objective, the Council asked Parliament to raise the rating threshold for residential property from R15 000 (as currently proposed) to at least the amount of the standard housing subsidy.

The SACC applauded the Bill's attention to the impact of rates on certain "welfare and charitable" organisations. However, it pointed out that this language was archaic and vague. It urged that local authorities instead be required to consider the impact of rates on all "public benefit organisations". This term, which is clearly defined in the Income Tax Act, includes a wide range of non-profit organisations in the fields of health, welfare, education, development, religion, culture, human rights and environmental conservation.

The Council also asked that the municipalities be obliged to alleviate the rates burden on public benefit organisations. One way of doing this would be to impose a lower rate on properties used by for public benefit activities. The SACC pointed out that "the state has recognised a compelling national interest in creating a hospitable fiscal climate in which public benefit organisations can thrive. This is linked both to the role of such organisations in augmenting the state's capacity to deliver services and also to a recognition of the sector's role in enhancing open and participatory democracy. … The national policies formulated to protect the state's interests in the national sphere should also be enforced in the local sphere."

Noting the importance of places of public worship in the social fabric of communities, the SACC asked that the existing rating exemption for places of worship be carried forward into the new legislation.

Other changes to the Bill proposed by the SACC's submission include:

• Establishing an initial one-year grace period to permit the filing and processing of applications for the continuation of existing rates concessions;
• Requiring valuers to take into consideration any restrictions on the use or development of property (e.g., zoning restrictions or national monument status); and
• Identifying a cheap and accessible mechanism to enable organisations to appeal against inconsistent or arbitrary application of a municipal rating policy.

The Constitution (s. 229) gives local government the power to levy property rates, but allows national government to regulate this power. Currently, rating powers are still governed by the four different provincial ordinances that were in effect in 1994. The Property Rates Bill will establish a consistent national framework for the formulation and implementation of rates policies by local government.

The SACC submission was developed in consultation with religious groups outside the Council and has received the endorsement of the South African Jewish Board of Deputies. The full text of the SACC submission is available on the SACC Parliamentary Office website.

For more information, contact the SACC Parliamentary Office at (021) 423 4261.