2008-03-25: New rates tariff approved by council
Johannesburg's new assessment rates were approved by the City Council on Thursday, 20 March, heralding good news for many home owners with a cents in the rand rate of 0,004 cents (less than half a cent).
The announcement of the final recommended assessment rates will assist all property owners to work out how much they will be paying in assessment rates from July this year.
The City's Executive Director Finance Mankodi Moitse says the City has tried to keep the policy - and the resulting tariffs - as simple as possible. "There is a story behind the numbers. We looked at the development paradigm of the City and said we would like Johannesburg to continue to be very competitive."
The new system of property taxation represents significant changes to the way in which the City collects rates and taxes and the vast majority of residents and businesses in the City will be affected. The main features of the new system are:
A change in the valuation basis, from site values to full market values;
A new valuation roll, the first since 2001, taking into account the growth in the property market;
A new property rates policy, requiring the first significant reconsideration of property tax since well before the democratic transition.
"The intention is not to increase the income of the City of Johannesburg but to ensure that all properties are valued based on their market value, that is, land and improvements," says Erika Naude, Director Rates and Taxes.
Around 20% of Johannesburg's total income is derived from the rates levied. This money is used to fund a variety of services that benefit all residents including emergency services, public facilities, safety, street lighting, clinics, community centres and parks.
In Johannesburg, it is proposed that the first R150 000 of the value of all residential property is excluded from rating and certain categories of ratepayers will pay less than in the past.
Throughout the public participation process the City emphasised a number of key principles that will guide it during the implementation of the new system:
That the City will adopt the principle of "revenue neutral", meaning that no major loss or surplus will be gained through the implementation of the Act to the total budget of Council;
That the City will ensure equity and fairness to all categories of property; and
That the City will endeavour to find mechanisms to mitigate against huge increases on the individual property owner, as a result of the implementation of the Act.
The draft final Rates Policy together with its by-laws were approved by the City Council at its meeting on the 31st January 2008.
Around 155 000 sectional title property owners and an estimated 70 000 additional properties will now fall within the tax net. Previously these properties fell below the threshold from which the City levies assessment rates.
The City of Johannesburg is committed to implement the Municipal Property Rates Act, 2004 in a fair and equitable manner, with minimal impact to the City budget and its ratepayers. The City wants to thank residents and businesses for their responses and participation in the public processes and trust that this constructive approach will continue to characterise the implementation in the coming months.