Covid-19 Disaster: Exempt citizens from property taxes

Ratepayers should not have to choose between buying bread or paying property taxes.

"The personal, social, and economic impact of COVID-19 is unlike anything experienced by the world in the past 75 years”, says Stats SA. As a third wave of Covid-19 is expected, a further extension of the national state of disaster, initially declared on 15 March 2020, seems likely. This will exacerbate the economic pressure on citizens and businesses. 

One way to alleviate this pressure is for government to reduce the administrative tax burden on citizens, such as property rates and taxes. Section 15 of Municipal Property Rates Act allows municipalities to exempt owners of properties from property rates & taxes when affected by a disaster.

The IRR wants to make it easy for you to apply for such an exemption. To do so, simply fill in the form below and click Submit. Your application will then automatically be sent to your municipality, with a copy to the Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma. The IRR will separately also be engaging with the Minister to encourage her to use this regulation to offer property owners relief.

Click here to read the letter that will be sent to the municipality and to the Minister.

Find out more

Sign the petition to request exemption from paying property rates and taxes during the state of disaster.

I hereby request that I be exempted from property rates and taxes during the national state of disaster as allowed for under Section 15 of Municipal Property Rates Act 6 of 2004.

I agree  

Section 15 of Municipal Property Rates Act 6 of 2004 is an existing policy tool available to government. Section 15 allows municipalities to exempt owners of properties from the payment of a rate levied on their property when affected by a disaster (within the meaning of the Disaster Management Act, 2002 (Act 57 of 2002)), or any other serious adverse social or economic conditions. Section 15 shows that Parliament, as the authors of this Act, had foreseen a situation where property rates exemption would be an apt measure to alleviate the financial strain faced by rate payers during a disaster. Section 15 is an existing and easily implementable policy solution that will provide immediate relief to citizens.

Municipal property rates and taxes are not associated with the delivery of specific services. Property owners, both residential and commercial, are liable for municipal property rates and taxes as a cost associated with ownership. Section 15 provides an important guideline where this cost of ownership need not be levied. From government’s own statements and actions, the current state of disaster falls within the parameters anticipated by Section 15.

Given the current state of disaster, the resulting social and economic restrictions and the express desire of government to alleviate the heavy burden these circumstances impose on citizens Section 15 of Municipal Property Rates Act 6 of 2004 should be aggressively employed as an additional relief measure for the remainder of the state of disaster.

Ratepayers should not have to choose between buying bread or paying property taxes. Therefore, exempting citizen from property taxes will provide important support to low-income households and families on the brink of poverty. Property rate exemptions will provide the middle class with additional spending power, allowing demand to recover faster and kickstart the economy.

Commercial property rates represent a significant cost to business in many municipalities.  Many small and medium business owners and workers are struggling to keep companies afloat. Property rates exemptions will help to reduce the administrative costs to do business and would help save jobs. Rates exemptions would help stabilise local and rural economies.

Municipalities are already faced with significant levels of bad debt. This would have increased since March 2020. In such a situation it becomes futile to levy rates that might never be paid – a bankrupt business or an insolvent individual cannot pay property rates. Thus by providing a property rates exemption, municipalities can in many cases sensibly manage their uncertain debt rather than having to write it off entirely. 

Property rates exemptions represent an administrative cost relief that will support economic recovery in rural and metropolitan areas. The past year, government across the national, provincial and municipal spheres expected citizens to do their part during the Covid state of disaster. Given the continued extension of this state of disaster, the time has come for government to do its part and direct all municipalities to urgently implement Section 15 and grant ratepayers exemptions as provided for in law.

Email to be sent to the municipal representatives:

During the last year and seven weeks since this country entered an official State of Disaster lives and livelihoods have been shattered. Nor is the end clearly in sight, with dire warnings of a third wave, and global challenges in acquiring vaccines against the invisible enemy known as Covid-19. As Stats SA unforgettably put it, “The personal, social, and economic impact of COVID-19 is unlike anything experienced by the world in the past 75 years”.

It is in this regard that I approach you with a simple request, namely that you grant me an exemption from property rates and taxes, as envisaged by the Municipal Rates Act (Act 6, 2004) and the Disaster Management Act (Act 57, 2002) read conjunctively. If ever a disaster conspired to bring about the extraordinary circumstances in which such a rebate – strictly limited and well defined within extant legislation – were applicable, it is now.

For the municipality, the three-fold advantage of implementing the exemption envisaged by legislation passed by South Africa’s 2nd and 3rd democratic Parliaments respectively is that it will:

  • boost household incomes;
  • boost business survival rates – and hence job preservation; and
  • relieve municipalities of the burden of attempting to collect bad debts, which exist chiefly as nominal assets on municipal balance sheets, since, in reality, countless households and businesses teeter on the edge of bankruptcy.

It is my conviction that, together, citizens and government can diligently and cooperatively rebuild the path to a free and prosperous South Africa. I acknowledge and appreciate the wisdom and foresight of earlier parliaments of the democratic era – even at a time of great economic growth and rapidly improving service delivery – to craft the contingencies now at the country’s disposal to ease the people’s plight at a time of great stress, anxiety and need.

I am convinced that these circumstances present an unparalleled opportunity to act for the betterment of all and look forward to receiving your favourable response via e-mail reply

Email to be sent to the Minister

During the last year and seven weeks since this country entered an official State of Disaster lives and livelihoods have been shattered. Nor is the end clearly in sight, with dire warnings of a third wave, and global challenges in acquiring vaccines against the invisible enemy known as Covid-19. As Stats SA unforgettably put it, “The personal, social, and economic impact of COVID-19 is unlike anything experienced by the world in the past 75 years”.

It is in this regard that we approach you with a simple proposal, namely that property owners be exempted from property rates and taxes, as envisaged by the Municipal Rates Act (Act 6, 2004) and the Disaster Management Act (Act 57, 2002) read conjunctively. If ever a disaster conspired to bring about the extraordinary circumstances in which such a rebate – strictly limited and well defined within extant legislation – were applicable, it is now.

The three-fold advantage of implementing the exemption envisaged by legislation passed by South Africa’s 2nd and 3rd democratic Parliaments respectively is that it will:

  • boost household incomes, particularly for poor ratepayers;
  • boost business survival rates – and hence job preservation – in both urban and rural areas, whether in formal, informal, industrial or residential precincts; and
  • relieve municipalities of the burden of attempting to collect bad debts, which exist chiefly as nominal assets on municipal balance sheets, since, in reality, countless households and businesses teeter on the edge of bankruptcy.

Moreover, Treasury shows that while municipalities have consistently failed to spend approximately 20% of their mainline budget items before Covid-19, this has skyrocketed since the state of Disaster hampered service delivery, with tens of billions of Rands unspent as of June 2020. To exactly what extent the situation has deteriorated further remains unclear.

If, as we hope, you are inspired by the South African Institute of Race Relations’ proposal, we request that you issue guidance to South African municipalities to consider favourably citizens’ applications for exemptions.

It is our conviction that, together, citizens and government can diligently and cooperatively rebuild the path to a free and prosperous South Africa. We acknowledge and appreciate the wisdom and foresight of earlier parliaments of the democratic era – even at a time of great economic growth and rapidly improving service delivery – to craft the contingencies now at the country’s disposal to ease the people’s plight at a time of great stress, anxiety and need.

We are convinced, Minister, that these circumstances present an unparalleled opportunity to act for the betterment of all.

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