"DUNNING LOCK" IN THE CONTEXT OF AWAITING THE RESULT OF YOUR GV2018 OBJECTION
With the 30 April 2019 objection deadline behind us and your objection hopefully successfully lodged, you may now be awaiting the result of such objection. Are you paying your new rates amount based on the GV2018 value, the GV2015 value or the value you motivated in your objection?
Having represented a large number of property owners with their GV2018 valuation objections, we have received many queries relating to the "inflated" rates that are based on the new valuations, whether the property owner has to pay these or can they base their rates on the value they claimed and what ramifications does this have in terms of interest on arrears etc.
We contacted the City of Cape Town for clarity on a dunning lock and what the practicalities are regarding such an option.
What is a dunning lock?
This is a "hold" placed on properties with outstanding value disputes, which is lifted once the dispute decision has been sent to the Revenue Office.
How do you arrange to pay your rates based on your previous valuation or on the objection amount?
You need to visit one of the City's "walk-in" centres to make an arrangement in person.
Such arrangement can only be made once your rates account is in arrears.
The walk-in centres can be found here: http://www.capetown.gov.za/Explore%20and%20enjoy/See-all-city-facilities/our-service-facilities/Walk-in%20centres
What are the benefits of making an arrangement?
If you've made an arrangement and your objection is unsuccessful or increases, interest will not be calculated on any outstanding amounts. Such interest would have accrued had an arrangement not been made.
No debt collection action will be undertaken on properties where payment arrangements have been made.
In summary, you are able to pay a lesser rates amount than what appears on your current (effective 2019-07-01) rates invoice from the City of Cape Town if:
- An objection was lodged against the property's GV2018 value
- Your rates account is now in arrears
- You make a payment arrangement at a walk-in centre
You will need to pay the adjusted (downwards hopefully) rates amount once the objection has been finalised, although you won't pay any interest on the outstanding amount (should you have paid less) had the objection been successful or not.
Author: Nina Vass