- Homeowners spared years of unfairly high business-rate tariffs after the court confirmed their properties are genuinely residential.
- Judge warns that ordinary residents should not suffer because municipal revenue policies are applied without regard for real-world use.
- Punitive costs are awarded after the City forces homeowners into prolonged litigation, adding stress and financial strain to affected families.
The debate over how the City of Johannesburg applies property rates to sectional title properties reached a decisive conclusion after Judge EF Dippenaar dismissed the municipality’s attempt to reclassify 24 residential units as business properties.
The dispute began when the City changed the classification of the units from sectional title residential to sectional title business, immediately leading to higher tariffs and eliminating important rebates. However, the units were never used for business purposes. The court heard that their zoning was part of a larger sectional title scheme and not based on individual owner intentions.
Actual use, not revenue targets
Judge Dippenaar emphasised that classification must reflect real-world facts. The judge noted it was “common cause” that every unit was used solely as a residential dwelling. In a pointed criticism of the City’s methods, she said the valuation official “aimed at elevating the criteria set out in the rates policy to be superior or overriding the provisions of the Act.” That, she found, could not be permitted.
The court made it clear that valuation powers follow national laws, not the municipality’s revenue goals. Judge Dippenaar stated, “The Appeal Board acted within the limits of its powers,” and it had the right to hear the appeal from the start. Even if the municipality disagreed, the judge said, the Board “did not seek to declare the City’s rates policy unlawful.”
A key concern in the judgment was about the behavior of the Municipal Valuer. Instead of staying independent, he took part in the litigation as a claimant. Judge Dippenaar warned that this could undermine the system’s credibility, saying, “It would have the potential to undermine [the Appeal Board] in performing its function.” When appeals succeed, she added, “the Appeal Board’s decision stands in the place of the decision of the Valuer.”
Punitive costs for unreasonable behavior
Perhaps the most striking aspect of the judgment was the punitive costs ordered against the City. Judge Dippenaar dismissed the claim that the municipality acted in the public interest. She wrote, “An organ of state… should not seek to extract revenue which is not owed to it,” adding that public interest cannot be used as a defense when the facts show otherwise.
The court also criticised delays, inconsistent record-keeping, and the City’s push to proceed despite having already reverted the classification back to residential since 2018. In simple terms, the case should never have gone this far.
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