Some pain, small gains in Johannesburg property rates

The proposed Johannesburg tariffs set to come into effect on July 1 come with good and bad news.

The good news is that prepaid and conventional electricity charges should drop by 5.2 percent for consumption up to 1 000kWh, but fixed costs such as network and service charges will increase by 28.4 percent for single-phase and 22 percent for three-phase customers.

More good news is that the six-month review of electricity usage, which determines inclining rates, is to be scrapped, meaning all charges start at zero each month as opposed to average increases if consumption is up on a regular basis.

This caused huge unhappiness in June, when prepaid users suddenly found themselves being charged on an increased-usage scale.

There is also good news for business and commercial property owners, as well as business sectional title units, as property rates are reduced by 9.7 percent. However, this will be counteracted by a new valuation of properties, effective from July 1.

For homes, there has been an increase of the entry level of exemption from rates from R150 000 to R200 000. This is the first time that an adjustment

Thas been made since 2008/9. This means that the first R200 000 value of the property will not be taxed.

Another small but welcome concession is a 5.2 percent reduction in residential agricultural homeowner rates. This sector has faced huge increases since it was decided to increase their rates from agricultural to residential in 2010, when about 5 000 Joburg smallholding property owners were slapped with R43 million in backdated rates bills after their properties were rerated from agricultural holdings to residential properties.

Pensioner rebates are up from R1.5m to R2m and the income entry level is up from R5 300 to R6 000.

DA spokesman for infrastructure services and environment in the City of Johannesburg, Denis Hunt, said electricity increases were unconfirmed, but some good parts were preliminary, as the true effects of the new Eskom increases had still to be worked out.

"City Power predicts a revenue increase of 8 percent. Overall increases could be steep because, for the first time, the City of Johannesburg has decided to increase tariffs as usual."

Hunt said he welcomed the introduction of inclining block tariffs. The restructuring was intended to encourage reduced consumption and a fairer structure, he said.

While this had to be welcomed, customers "who appreciate the benefits of electricity are likely to be paying more, and above inflation. That can't be good for the economy. We do not think that a net increase above the inflation rate should be the case," Hunt said.

A 5.3 percent rate increase might normally be considered as fair. "However, this is also the year in which the new property valuations come into effect, and this is expected to yield an increase of property values by probably, on average, between 10 and 30 percent for each household or property.

"So the householder is likely to see an increase on this account on top of the 5.3 percent. In some years previous to this, the city did not increase the rates in the revaluation year. Why not this year?" he wondered.

The council stressed that the rates increases were only proposals at this stage and residents and businesses would have an opportunity to lodge objections against these proposed hikes.
The revenue department spokesman, Stan Maphologela, said public meetings would be held from today until April 24 at peoples' centres for residents to make their inputs. Residents are encouraged to attend.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us