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No plan to increase rates levied on second homes

Category Market

Amendments to property rates legislation target guesthouses and small hotels, but not second homes, as widely reported yesterday, says the Department of Co-operative Government and Traditional Affairs.

Proposed amendments to the Local Government Municipal Property Rates Amendment Act were intended, instead, to ensure that guest houses, bed and breakfast establishments, small hotels and other such establishments pay commercial rates, the department said.


Estate agents, residents' associations and Local Government MEC Anton Bredell had raised concerns that owners of residential properties let out to tenants would be charged these higher rates and that the bill would force up rents as owners passed on the increased costs.

Deputy Minister of Cooperative Government and Traditional Affairs Yunus Carrim sought to dismiss these fears yesterday.

"We understand, especially in these difficult economic times and with increases in the cost of municipal services, that house owners are anxious about property rates.

"But, contrary to media reports on the draft bill, people who own more than one residential property will not have to pay commercial rates on their additional residential properties."

There had been concern that increased rates on additional properties would mean landlords would pass the extra costs to tenants.

The draft bill proposes the definition of residential property be changed to include only "property of which the primary use or permitted use is for residential purposes, excluding such property used to accommodate persons other than the owner for gain".

Carrim said if necessary, the department would amend the draft to make this clearer before submitting the bill to Parliament.

"The draft bill is in response to complaints from the public and some municipalities over the years about the lack of clarity of aspects of the original act and difficulties in implementing it. There was widespread consultation on the draft that has been gazetted.

"Public hearings were held in April last year in all the provinces, and were attended by stakeholders such as ratepayers' organisations, agricultural unions, business chambers, state-owned enterprises, community organisations, traditional leaders, municipalities and individual ratepayers."

Carrim said the Municipal Property Rates Act was being amended to make property rating simpler, more transparent, more uniform and easier to implement.

The draft bill was gazetted for comment on June 9. Interested parties have until this Friday to comment by fax to 012 334 4811, or by e-mail to mpra@cogta.gov.za.

Author: Cape Times

Submitted 19 Jul 11 / Views 17828