What is the difference between rates and taxes, and levies?

Rates and taxes can be explained as a charge raised by the local municipality for the services provided in relation to the property such as refuse collection.

The amount charged is a percentage of the market value of the property. It is mandatory that, prior to registration of transfer, a rates clearance certificate is obtained from the local municipality. The municipality issues figures that include all amounts owing in respect of rates and taxes for the two-year period preceding the date of application and the estimated amount for municipal services in advance.

Levies, on the other hand, are payable by sectional title unit homeowners or homeowners that typically reside within an estate.

The managing agents for the scheme or estate will recover levies from each individual homeowner and utilise them towards maintenance costs, management, and upkeep. To obtain a levy clearance certificate, a conveyancer will request clearance figures from the managing agents for the scheme or estate.

These figures will include any outstanding levies, interest on overdue accounts, special levies, scheme contributions, and administration fees that might be applicable. The figures may also include an estimated advance for a period stipulated by the managing agents.