Rates questions answered

Often there is confusion regarding the City of Johannesburg’s Property Rates Policy. In this article the Record will attempt to answer the most frequently asked questions.

• What are municipal property rates?

Municipal property rates are the financial and legal responsibility of every property owner in the City.

• What is property rates revenue used for?

Municipalities need a reliable source of revenue to provide basic services and to perform their functions. Property rates are the most important source of general revenue for municipalities, especially in developed areas.

Property rates are used to assist in building financially and economically viable municipalities. That is to enable municipalities to meet the service delivery priorities of communities.

These services include:

– Providing fully operational clinics, parks, recreational facilities and cemeteries

– Providing and maintaining streets, roads, sidewalks, lighting and storm-water drainage facilities

– Fund municipal administration costs

• Who pays rates?

Rates are paid by all owners of property whether residential, commercial or sectional title units. Even government institutions pay rates.

• What is a rates policy?

The City’s Rates Policy is a requirement within South Africa’s Local Government: Municipal Property Rates Act. The Rates Policy determines categories of properties, which are rated according to a tariff for each category listed in the policy. The City applies a concept of differential rating, which indicates that the tariff is not constant across categories of property.

• How does the City calculate rates?

In terms of the Local Government: Municipal Property Rates Act, rates are calculated on the value of the property. This Act requires that this value must be “market value”. Rates are calculated by multiplying the market value of the immovable property by an amount in rand that is determined by the annual budgeting process.