National Assembly provincial and local government committee chairman Yunus Carrim on Wednesday sought to clarify apparent "misunderstandings" about the new Property Rates Bill, soon to be enacted by President Thabo Mbeki.

Some political parties have raised "practical concerns" pertaining to the capacity of municipalities to implement the bill.

In a statement, Carrim said his committee would like to see the bill come into effect from the beginning of the new municipal financial year on July 1.

Municipalities would have up to four years to phase in the new rates system sensibly, he said.

The bill is aimed at introducing a new municipal property rates system, and was approved by Parliament earlier this year.

It allows municipalities, if they want, to extend the levying of rates to properties that have until now been partially or fully excluded from rates.

These include the properties of public entities, farmers and others in rural areas, religious, welfare and charitable organisations, independent schools, and conservation bodies.

Carrim emphasised there were no dramatic increases in property rates pending.

Property rates would be based on the market value of land and buildings.

"Where the values of properties shoot up because of the new system, the amount of cents to be paid for every rand of value will be reduced.

"So property owners will pay much the same rates as now.

Increases will be inflation-related, and not linked to a change in the system," Carrim said.

There were also several provisions in the bill allowing the minister of provincial and local government to "sensitively intervene" to prevent dramatic rates increases.

Firstly, the minister of finance limited the percentage by which municipalities could increase their budgets.

For the past few years this had been put at six percent.

The minister of provincial and local government could also limit the percentage by which municipalities could increase rates each year, he said.

In addition, any sector of the economy could approach the minister to intervene if their rates bills were unreasonable, and the minister could also provide a national framework or guidelines to municipalities on the levying of rates.

Under the Constitution, municipalities could not apply rates in a way that undermined national economic policies.

"The government is committed to keeping inflation low, and tax to GDP ratios at 25 percent.

"So rates will not be applied in a way that undermines macro-economic stability. The ministers will intervene, if necessary," Carrim said - Sapa.