The City of Cape Town is encouraging the public to make an application for grants to assist their community projects. In a statement, the City said non-profit organisations should apply so that they can continue to receive financial assistance after changes to national legislation limited the options available to the City to give rates rebates.
The City hosted more than 36 public benefit and non-profit organisations (PBOs and NPOs) last month at the Cape Town Civic Centre to outline how changes to national legislation impact their access to financial assistance and what can be done to ensure that they continue to receive support.
Amendments to the Municipal Property Rates Act necessitated a substantial change to the City’s Rates Policy to bring it in line with the amendments. In terms of the amendments to the Municipal Property Rates Act, the City was required to institute new property categories and align its rebates, reductions, and exemptions to the amended national legislation. The amendments had to be implemented simultaneously with a new General Valuation Roll, which came into effect on 1 July 2019.
The legislative amendments have resulted in two major changes in the way municipalities are required to treat PBOs and NPOs. The first major change is in respect of property categories. In compliance with the national legislation, the City has established 12 new property categories compared to the five that it had in previous years.
One of the new categories is called “Properties owned by public benefit organisations and used for specified public benefit activities”. Properties in this category will be rated at no more than 25% of the residential rate-in-the-Rand. The amended legislation limits this category to registered PBOs that operate in the welfare, humanitarian, health care and education fields, as indicated in Part 1 of the Ninth Schedule of the Income Tax Act.
Unfortunately, NPOs and PBOs that are not involved in those narrowly specified public benefit activities and that do not own their own properties will not qualify for rates relief in terms of the national legislation.
The second major change is in respect of rates rebates. The amendments to the national legislation have had a profound effect on how the City can give rates relief to property owners, and severely limited its discretion to determine who would be granted property rebates.
Previously, generous relief was granted, particularly to PBOs and NPOs. Unfortunately, the manner in which rates rebates for these organisations was traditionally assessed and granted is no longer permissible, and the City may no longer grant rates rebates to organisations on an individual basis.
The City has therefore identified the grant-in-aid process as a mechanism to continue providing financial relief to the affected organisations. A dedicated amount has been budgeted for additional grants-in aid. PBOs and NPOs are encouraged to apply for a grant-in-aid, irrespective of whether they fall within the new PBO rating category or not.
‘I would like to emphasise that, despite these nationally mandated amendments, the City will continue to provide assistance where it can,’ said the City’s Acting Mayoral Committee Member for Finance, Alderman Felicity Purchase.
‘We feel very strongly that it is important to continue providing support to PBOs and NPOs because of the critical and important work that they do. Their contribution to the well-being of our city and its people is invaluable and they can rely on our continued support. We have identified grants-in-aid as an alternative option to continue providing support and I would like to encourage these organisations to apply.’
The grant-in-aid process is very different from the rates rebate application process, and information on how to go about the application can be accessed on the City’s Get Grants-in-Aid funding website. The closing date is August 30. (City of Cape Town)