City of Tshwane Metropolitan Municipality v Blom and Another

The second respondent owned a property in Brooklyn, Pretoria, zoned for residential use. The first respondent, a firm of attorneys, leased and used the property for business purposes contrary to the applicable town-planning scheme. Acting under its rates policy adopted in terms of the Local Government: Municipal Property Rates Act 6 of 2004, the City of Tshwane categorised the property as being used for 'non-permitted use' and levied higher property rates accordingly. The respondents challenged this categorisation and levy, contending that the Rates Act did not permit municipalities to create a category of 'non-permitted' or 'illegal' use and that the higher rate amounted to an unlawful penalty.

The appeal was upheld with costs, including the costs of two counsel. The order of the North Gauteng High Court was set aside and replaced with an order dismissing the respondents’ application with costs.

The judgment confirms municipal autonomy in property rating policy and clarifies that the categories listed in s 8(2) of the Municipal Property Rates Act are not exhaustive. It affirms that municipalities may lawfully rate properties differently based on non-permitted use and that differential rates do not constitute unlawful penalties. The case is significant for statutory interpretation of fiscal powers and for reinforcing the legislative nature of municipal rating decisions.