The Gauteng High Court, Johannesburg, has set aside the city’s metropolitan municipality’s 2023/2024 property rates by-law, as well as the property rates policy with regard to the categorisation of educational institutions, declaring it unconstitutional.
The ruling follows the city's removal of a property category that applied to educational institutions and adopted a property rates by-law and policy that categorised private schools as public enterprises. This led to a drastic increase in property rates and taxes for private schools and other educational institutions.
Various stakeholders, including Curro Holdings, the Independent Schools Association of South Africa, and AfriForum launched the application following the drastic school rates increase.
The court found that the city’s public participation process in adopting the 2023/2024 property rates policy was inadequate and did not meet constitutional and statutory requirements.
It further found that the metro failed to meaningfully consult with stakeholders, including independent schools; ignored the best interests of scholars and thereby violated the Constitution.
The city’s rates policy, which came into effect on July 1, 2023, reclassified privately owned properties used for educational purposes under the “business and commercial” category, resulting in significantly higher property rates.
Before the 2022/23 and 2023/24 rates policies, properties falling under the category “education” enjoyed the benefit of favourable rating ratios of 25% of the rating for residential properties. The significant change that occurred in the subsequent rates policy was the removal of the category of “education”.
As a direct consequence of the classification of these “properties zoned and used for educational purposes but privately owned” under the “business and commercial” category in the 2023/2024 rates policy, substantial increases in the amount payable on the affected properties resulted.
It was argued by the applicants that the Constitution provides that a child's best interests are of paramount importance in every matter concerning the child.
The court was told that independent schools make an indispensable contribution to expanding and improving access to basic education for thousands of children in the city.
They pointed out that the Gauteng Education Department confirms that public schools in Gauteng are in crisis and that they do not have capacity to accommodate the growing number of learners in the province.
Judge Phaneul Mudau remarked that the unaffordability of fees due to the increased rates following the new categorisation of private educational properties is bound to negatively impact access to basic education, given the notoriously constrained capacity of public schools across the city.
“In all these matters, the city failed to consider the best interests of the children that attend independent schools when it decided to re-categorise private educational properties and consequently breached Section 28(2) of the Constitution which guarantees everyone the right to a basic education.”
The judge added that it further obliges the State, including the city, to take reasonable measures to make further education progressively available and accessible.
In finding that there was no proper public participation process by the city before it reclassified the properties, the judge had some harsh words. “The public participation process was undoubtedly a sham process,” the judge said.
Mudau added that to this end, the city is guilty of dereliction of their duty towards the public and have been poor stewards of the trust reposed in them.
AfriForum, meanwhile, said schools are struggling to stay afloat with large numbers of learners and lower incomes. According to the organisation, municipalities cause this sector to be further crippled with excessive and ridiculous property rates and taxes.