RATES INCREASE – TAKE A STAND

Wakefields Real Estate has been involved in residential property in eThekwini for almost 80 years, offering four generations of experience and expertise. As a team, Wakefields monitors and evaluates every element of homeownership which impacts on buyers, sellers and, indeed, the province’s property market.  

Rates are one of those. 

In July this year, all homeowners within eThekwini municipality will face a sizeable rates hike, representing a combination of new valuation figures as well as another increase in the rate randage (or rateable value). For some, this will mean an untenable increase of up to 70 percent.

The Rates Act of 2004 states that, “The objective of this policy is to regulate the power of the Municipality to impose rates on property in a sustainable, fair and equitable way”.

Are the forthcoming rates’ criteria, sustainable, fair and equitable? eThekwini’s residential rates have escalated dramatically over the past five years or so, in many cases to the point where they’re unsustainable. This projected increase may be, for many homeowners and prospective homeowners, the straw that breaks the camel’s back…at a time when South Africa needs to facilitate entry into the property market, and consolidate all-round growth. To put it in context, our residential rates are around double those in Gauteng, and significantly higher than the Cape. On Industrial and Commercial rates, eThekwini is 0.0349 compared to Johannesburg 0.01798. That means someone thinking of building a factory would pay 94% more in rates if he built in eThekwini compared to Johannesburg.

Not only then are people paying significantly lower rates for homes and business premises in Gauteng and the Cape, but with generally lower salaries in KZN, residents are paying a significantly higher proportion of their salaries too. For business to thrive in KZN, rates need to be sustainable.

Ask yourself, is the 2017 Valuation role in contravention of the Act? And if you deem the Municipality’s rates’ practices to be unconstitutional and unfair, do you have any power to alter this course of action?

Yes, you do. 

eThekwini Municipality has received, and continues to do so, thousands of letters and demands around this topic…with some success. There have been some minor victories, including unofficial communication by Council that they are currently considering a slight reduction in rates. 

As concerned and affected citizens of eThekwini, smart, concerted community involvement is vital to effect change. Pick up your pen or fire up your computer, and send your concerns to the mayor, CEO and Ombudsman: mayorspa@durban.gov.za; metroceo@durban.gov.za; ombudsperson@durban.gov.za. 

Here are a few questions to ask:

1. Why are there such discrepancies in valuation? How are properties valued and why is it such an onerous task to appeal against an over-valued property?
2. Any rate randage figure above the 2012 figure of 0.00976 is an increase above inflation, and therefore, effectively, as stated in the Rates law, illegal, unequal and unfair. The new figure being discussed for 2017 is above inflation. How can the municipality justify this?
3. Why has the pensioner discount not been increased with inflation?
4. Why has the State and Municipal rebate of R120 000 not increased over the years? In Gauteng it is R200 000.

STAND UP AND BE COUNTED 

If you believe the proposed rates are NOT sustainable, fair and equitable, exercise your right, and WRITE it down. Last thought: Capital is like water, it follows the path of least resistance. If we want capital growth, development, sustainability and a healthy economy in KZN, we need to ensure that the Municipality addresses the rates issue.