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2008-06-13: Rates policy is a first

Businesses must make sure that they are in the right property rate category. While it is true that 23% of businesses will pay more as from July 1, 35% will pay less.

"If a business is in the wrong rate category, it may be paying at the wrong rate - thus the City's call to businesses to check the valuation roll," said Erika Naude.

She was speaking at a business breakfast hosted by the City of Johannesburg in Sandton on Thursday, 12 June. Naudè, CoJ Rates and Taxes Director, reminded attending businesspeople that the rates policy is the first one in the city's history.

The approach is to keep the rates policy simple, easy to implement and administer. There will be an annual review where more detail may be added as the system becomes more sophisticated. Further work has already started to consider detail about specific initiatives such as Special Rating Areas.

Businesses in Johannesburg, which currently contribute around 38.4% of all property rates, will pay at a level of 1.2 cents in the rand as from July 1. That is when the new Municipal Property Rates Act becomes effective.

There are just under 36 000 commercial and industrial properties in the city's rates database. They account for around 5.7% of the total rated property base and around 21% of overall property values but these figures will change to 4.6% and 19.4% respectively after July 1.

"The City has incentives in place, such as a 40% rebate in the Inner City in cases where property has been re-developed to allow for 80% residential and 20% commercial usage," stated Naudè

Business property owners who want to calculate their property rates can apply the following formula: property's value (R5 million) multiplied by tariff (0.012) equals R60,000, divided by 12, equals monthly property rates of R5,000.

It is important to note that rates for sectional title business properties will be much higher than in other business categories as all sectional title properties - residential and business - are being separately valued for rates purposes for the first time.

Further information about rates can be found on, by emailing e-mail address is being protected from spambots. You need JavaScript enabled to view it , or by phoning 011 375 555 and choosing option seven for rates policy.