File picture: Russell Cleaver, Shelley Kjonstadt

Durban - All homeowners in Durban will have to apply for a rates rebate that, until now, has been automatic. This will have to be done each year as city bosses look to increase the rates coffers.

Every homeowner gets a rates rebate of R185 000 on their property’s valuation, regardless of the value.

If, for example, your property is valued at R1 million, the rebate is R185 000, which means you pay rates on R815 000.

From the next financial year, the rebate will continue to be available, but property owners will have to apply to the municipality for the benefit or pay rates on the full amount.

Those who own vacant land will lose their automatic R30 000 rebate unless the property is to be used for low-cost housing.

In a meeting of the executive committee yesterday, a report was tabled and accepted by all except the Minority Front, which abstained, on the rates policy for the 2014/15 financial year.

City treasurer Krish Kumar said this financial year would be used for the registration of those applying for rebates and the full system would be up and running in 2015/16.

“Only property owners who apply will receive the benefit,” he said.

“At the same time, the council will be able to update information on properties.”

With the rebate on vacant land removed, Kumar said, it was hoped property owners would sell or develop within the densification initiatives of the city and manage their land more effectively.

DA councillor Heinz de Boer said the party “fully supported” the stripping of the rebate.

Developers like to bank land so they can make a profit when they sell it,” he said.

Development drive

This vacant land had become a nightmare for the city because it was often not maintained and rats and snakes would breed on it, which was a hazard for people living nearby.

“We hope, when we hit owners in the pocket, they will take better care of their land or even sell it to the municipality for housing,” De Boer said.

Lillian Develing, chairwoman of the Confederation of Mistbelt Ratepayers and Residents Associations, said applying for the rebate would be “a logistical nightmare” and landowners would probably abandon attempts because of queues.

The automatic system was better. I think many landowners will end up selling because this will be too expensive for them. The municipality is trying to increase its rates base, which is good for them, but it will be tough on some ratepayers.”

Kumar said owners of vacant land who offered it for low-cost housing would get the rebate, but this would be with the condition of confirmation from the housing department.

Last night, Tongaat Hulett Developments director Mike Deighton said that with the high rates levied on vacant land, the rebate was “low and immaterial”.

“The key thing is that a rates policy is an important tool that should be used wisely to encourage investment between the municipality and the private sector,” he said.

By this he meant there should be more focus on creating investment

opportunities. - The Mercury