Deputy Minister for the Department of Cooperative Governance and Traditional Affairs Yunus Carrim said last week the proposed bill still needs to be revisited and aggressively discussed before any decision is taken.
“Although comments closed on 22 July, the public and stakeholders can still send their comments once the proposed bill is in Parliament,” said Carrim.
Speaking on SA FM with Property24’s Mari van Wyk, Carrim said it is not the intention of government to subject people owning more than one property to paying commercial property rates.
In fact, he said, if anything, the proposed bill seeks to protect rate payers.
As an example, he said many people run small businesses from home. These include panel beaters and bed and breakfasts. In this case, the local municipality has a right to subject such property owners to paying rates accordingly.
Carrim explained that property rates are used by municipalities for the general upliftment, such as the upkeep of parks, roads and sports fields. Because at times these have no direct benefit to the property payer, people tend to be reluctant to pay rates.
“The proposed bill will assist small municipalities at the same time protect property rate payers.”
Van Wyk said many people were concerned about the proposed bill as they derived income from their rental properties
“Property owners and investors are afraid that should the bill be passed in its current state, they will lose income and sit with empty properties without tenants to rent out to,” said Van Wyk.
She said this proposal will put off people wanting to enter the property market. With an already oversupply of property, additional stock would flood the market and a resolution was needed to ensure all concerns were clearly fleshed out.
Carrim said it was clear to his department that extensive discussions were called for to clarify what the proposal entails. The bill will be amended, although he didn’t think that it was badly drafted to begin with.
He emphasised the fact that any decision on what property rates should be remain the decision of municipalities.
Van Wyk mentioned that there is fear among property owners that this bill seeks to give government power in that property evaluations will now be done within five and seven year periods.
Carrim said the regulations in the proposed bill will protect people owning homes that are below a certain threshold, hence the extension of evaluations.
He said the reason evaluations will now take longer is because small municipalities in particular battle to find property valuers every four years. If they are given between five and seven years, it ensures that properties within that municipality are valued properly for billing purposes.
However, he said only very few municipalities will be able to conduct property evaluations in seven years.
“The other reason is to expand the pool of valuers. At the moment, property evaluations are done in a rush leading to incorrect valuations,” said Carrim.
Carrim said farmers for example pay property rates but get no municipal services in return. In light of the bill, municipalities will now have to take into account the contribution of what the farms within their scope provide and each municipality is bound by this stipulation.
He called for calm and encouraged the public to familiarise themselves with the proposed bill and urged them to further comment once the bill is before Parliament. – Denise Mhlanga
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This is ridiculous, now property owners must start to pay for poor management!! You cannot penalize the person with more than one property then you discriminate against the person and not the Property! Please see that home owners in Affordable housing is also paying property tax and that the people living in other areas do not pay for them!! We are not a communist country where the rich must take care of the poor and the “governing body” put the money in their pockets. Please can’t somebody stop this?? - Lida
With the electricity that is sky high, most people will feel relieved if the property rate can be a flat rate for home owners, investors and bed & breakfast or business . What I mean, home owners pay R150, investors pay R200 and business pay according to their income. - Elsabe
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