Wealthy communities around the country that are being milked by municipalities for property tax, could benefit from the legal principles that were recently crafted in the North Gauteng High Court in Pretoria.
So says Derek le Roux, chairman of the Silver Lakes Homeowners Association that struck a deal with the Kungwini municipality in Bronkhorstspruit on behalf of the residents of Silver Lakes and the surrounding areas.
The settlement was made an order by the court and Len Dekker, the attorney who represented the residents, says it offers a better solution for these communities than withholding taxes.
Silver Lakes, Mooikloof and other surrounding areas, collectively known as the Kungwini West Alliance (KWA), are situated in the east of Pretoria, but fall within the boundaries of Kungwini. These predominantly wealthy areas have been heavily taxed in the past by Kungwini and contribute two-thirds of the municipality's income derived from property tax.
These communities claimed a previous victory when the Court of Appeal overturned their unreasonably high taxes for the 2004-2005 financial year.
They also submitted another court application regarding the property tax for the two following years. This application was still pending, but was repealed under Friday's settlement.
According to the settlement the property tax tariffs for these two years will be lowered by 10% per year.
Taxpayers who have already paid this tax according to the higher tariffs and still have running accounts with Kungwini, are now entitled to credits, says Le Roux.
The settlement allows the residents of Kungwini West, who didn't pay tax for the three financial years due to the pending court judgement, to qualify for an incentive scheme for arrearages until 12 February 2010. The scheme offers a 30% discount if the account is fully settled, despite the deadline for the scheme already lapsing in November.
Morover, the Kungwini municipality is obliged to consult the KWA on its annual budget, its integrated development plan and its property tax policy.
Dekker says although consultation is prescribed by municipal laws, the settlement confers the duty on the municipality to consult this specific community. "If it isn't done, it amounts to contempt of court."
The last groundbreaking clause is that at least 30% of the annual income from property tax coming from these communities must be spent inside the same communities – on projects identified during the consultation process.
Le Roux says the communities have never objected to contributing to service delivery in poorer areas of the municipality, but the infrastructure has to also be upgraded in their area due to rapid expansion. He says there are also poorer residents in their midst, such as those in the LNJ squatter camp, where service delivery is vital.
Le Roux says the KWA will encourage its members to pay their property tax on time.
Dekker says the settlement is a better option than withholding property tax to protest against poor service delivery in a specific community – as is the case in Sannieshof in the North West province.
"If you withhold tax, you can't sell your property, because you can't get a clearance certificate."
He says the settlement offers a win-win solution for all parties within a legal framework that makes it binding. – Antoinette Slabbert, Sake24
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