News of the proposed amendments to the Municipal Property Rates Bill came as a shock to the real estate industry and multiple property investors.
Adrian Goslett, chief executive officer of RE/MAX of Southern Africa, says that although government has since gone on to say that the amendment was not directly aimed at those who owned more than one property and that second homes would not be affected, the statement rectified the belief that second homes would be regarded as commercial property and not residential homes and would be rated as such.
Goslett notes that despite the reassurances by government that the amendments to the Bill would not impact on ordinary South African homeowners, the fact that the wording of the Bill was vague highlighted the need for property owners to keep their eyes and ears firmly fixed on changes in legislation that will directly affect their investments.
He says it would be unfair to assume that government had intentionally tried to get the amendments passed with little or no comment. The fact that officially very little time was allowed for homeowners to object is of concern.
He points out that while the backlash by homeowners may have instigated the decision by government to announce that the proposals wouldn’t affect average homeowners, the fact that legislation of this magnitude could have made it as far as the drawing board.
Goslett emphasises the need for all property owners to heed what is happening on their front doorsteps.
He believes that South African homeowners should take a proactive approach when it comes to legislation that may affect their property investments.
It is the homeowners’ collective responsibility to be aware and pay attention to proposed changes in the law that may impact both the real estate industry and the general public directly, he says.
The impact that this small amendment would have had on the second home market would have been devastating.
Had the legislation in its initial form been passed, the costs associated with homeownership would have risen dramatically and would have adversely affected not only the buy-to-let sector, but would also have had an extremely negative impact on tenant’s themselves.
He says that although commercial rates vary from region to region, the property rate on a second Johannesburg home valued at around R1 million would have risen from somewhere in the region of R400 a month to approximately R1 500 per month.
In Pretoria the situation would have been worse with rates on a property of similar value escalating from approximately R600 month to around R2 000 per month.
He explains that although property rates in Cape Town are lower than their upcountry counterparts, commercial rates are significantly higher than residential rates and second home owner’s rates bills would have climbed from approximately R400 per month to R935.
Property ownership in South Africa remains a stable and lucrative form of investment. Interest rates remain at the lowest that they have been for years and house prices remain favourable.
He adds that this is an ideal time to invest and as long as homeowners stay abreast of proposed changes in legislation that could affect them, South African property investments will continue to shine.
Readers' Comments Have a comment about this article? Email us now.
Print
