Rates Policy Review Presentation 2013

CITY OF JOHANNESBURG CITY OF JOHANNESBURG

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Table of contents

1. Legislative background

2. Overview of Rates Policy

3 Categories of ownership for the purpose of rebates and exemption

4. Rebates per category of property

5 Ratios per category of property

6. Rates Policy issues raised in 2012

7. Issues to be considered in Rates policy for 2013/2014

8. Questions and discussion

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Processes and Dates for Rates Policy review

First phase public input into the current rates policy

Second phase proposed Rates Policy and proposed Tariffs (April 2013)

Due date for comments, submission and inputs is 9 February 2013

Current Rates policy is available on : www.joburg.org.za

Written comments can be:

Emailed to : RatesComment@joburg.org.za

Fax Number : 011 727 0189

Drop off : Jorissen Place (Reception)

66 Jorissen Street

Braamfontein

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Legislative framework

The Constitution of the Republic of South Africa 1996 empowers the Council to levy rates on property.

Section 4(1)(c) of the Systems Act, the Council may, inter alia, levy rates on property to finance operational expenditure of the Council.

In terms of section 62(1)(f)(ii) of the MFMA, the Municipal Manager appointed in terms of section 82 of the Structures Act, must, in his capacity as the Council’s accounting officer, ensure that the Council has and implements a rates policy.

Property Rates act state that Council:

must, in terms of section 3(1) of the Act, adopt a policy consistent with the Act on the levying of rates on rateable property in the municipality.

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Overview of Rates Policy

Property rates is a tax in terms of Section 11 of the Prescription Act 68 of 1969 and the Council may recover rates in arrear for a period of up to 30 years

The Rates Policy guides the City in all aspects of levying rates on property owners as required by the Local Government Municipal Property Rates Act 6, of 2004 (MPRA)

During the City’s budget process, the City determines the rates tariffs for the new financial year. This is called the rate in the Rand. Property Rates are levied as a cent in the Rand based on the market value of the property as reflected in the valuation roll.

Planning department through its ordinances governs land use by affecting zoning as per the Town planning by-laws

The Council levies different rates for different categories of rateable property based on zoning

The Council through the Rates Policy gives reductions and rebates on certain categories of properties as promulgated

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CATEGORIES OF OWNERSHIP FOR PURPOSES OF EXEMPTIONS AND REBATES

Rebates are granted subject to successful written application

• Residential properties owned and occupied by natural persons:

– With limited income

– Who are dependent on a social assistance (ESP)

• Pensioners provided that they meet the City’s criteria:

– Must be 60 years of age or older

– Dependent on a National Security Grant qualify for 100% rebate

– Whose gross monthly income falls below R5 600 qualify for 100% rebate

– Whose gross monthly income is above R5 600 but less than R10 300 qualify for 50% rebate

– The rebate is valid for two years after which the Pensioner must re-confirm his or her status

– Sectional title zoned business but used for residential purpose

• Can apply for change of category

– No retrospective rebates will be granted

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REBATES AS PER CATEGORY OF PROPERTIES

Residential Value ExclusionFirst R150 000 of value of all

residential property to be excluded from rating

Other rebates :

Pensioner owners where gross monthly household income is lower than R5 600

100%

Pensioner owners where gross monthly income higher than R5 600 but lower that R10 300

50%

Sectional Title Residential 20%

Heritage Sites 20%

Organisations with purpose of Animal Protection 100%

Primary and Secondary Schools 50%

Technical Colleges 20%

Universities and Tertiary Education Facilities 20%

Property Owned by Organisations in terms of the Housing Development Schemes For Retired Persons Act

50%

Vacant Land subject to conditions 50%

Private Sports Clubs 40%

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Categories of properties and Ratios 2012/2013

Category of property Ratio 2012/2013Agricultural Holdings 1Business 3.5Business Sectional Title 3.5Education 0.25Public Benefit 0.25Farming land/Property used for bona fide farming 1

Mining 3.5Multiple purpose 3.5Municipal Not Rateable 0Municipal Rateable 1.2Public Service Infrastructure 0Religious 0Residential 1Sectional Title 1State 1.5Vacant 4Residential Property with Consent Use 2

Public service infrastructure privately owned 0.25

Private open spaces 0.25

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Rates Policy Issues raised during 2012 review process

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Issues to be considered for 2013/2014

1. Reducing or increasing the threshold

2. Increasing pensioner threshold rebate/Value

3. Excluding pensioners older than 80 from paying rates

4. Agricultural holdings

5. Child headed families

6. Military veterans

7. Setting threshold for properties

8. Rebate for paying rates 12 in advance

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