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Tuesday Apr 03, 2012

Chamber laments Cape rates increases

When rates for all property categories in the City of Cape Town increase on average by 8 percent, coupled with a number of tariff hikes at the same time, it would be an "absolute disaster" for residents and small businesses, says the Cape Chamber of Commerce.

The proposed increases were listed in the draft budget presented last week by Mayor Patricia de Lille, a budget she said was meant to be pro-poor and pro-growth.

If her budget is accepted after a public-participation process, the full council will adopt it in May, in time for the next financial year on July 1, when the increases kick in.

Individual tariff increases from July are:

  • Electricity, 11.03 percent

  • Waste removal, 7 percent

  • Special waste (hazardous), 24 percent

  • Water and sanitation, 15 percent

  • Bulk water tariff, 6.5 percent.

    Rates for a "middle income range" household will increase by 12.7 percent. This means a household paying R1 843 per month in the current financial year will be paying R2 077.06.

    A household in the "affordable range" paid R1 061 total rates bill per month, but this will go up by 11.3 percent to R1 180.90. A monthly account for "indigent household receiving free basic service" will increase by 10.3 percent from about R464 to R512.

    "The bottom line is businesses are going to have to swallow the costs and can't pass them on to the consumer, which is outrageous. It's going to push a lot of businesses to the wall," said Chamber president Michael Bagraim.

    The 11.3 percent electricity increase might be lower than last year's 20 percent, but it was still high when added to petrol increases, he said.

    "Local government is being very unfair. For electricity distribution costs, they don't have to pass those on to the consumer," said Bagraim.

    The draft annual report states that the proposed property rates are to be levied in accordance with council policies, the Local Government Municipal Property Rates Act 2004 and the Local Government Municipal Finance Management Act 2003.

    "The Draft Rates Policy was compiled taking into account feedback received from ratepayers and client interface staff during the financial year up to mid-february 2012. The Total Municipal Account is modelled to assess the impact of all council charges on a household for affordability. The proposed average rates increase is 8.0 percent for all categories of properties whilst the estimated total rates income is increased by a further 1 percent to take into account natural growth," read the report.

    But there is good news for some property owners.

    The draft budget states that for all residential properties up to the first R200 000 of property value will be rebated by the amount of rates payable on a R200 000 property.

    De Lille said at the draft budget announcement: "To take the city to the next level of government, we must have the resources to help us."

    Cape Times

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