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City urges ratepayers to look at total account

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City urges ratepayers to look at total account

by City of Cape Town
02 Aug 2007
City of Cape Town
City of Cape Town

Due to the implementation of the Municipal Property Rates Act 6 of 2004, Council could no longer recover some of the Refuse Removal and Sanitation costs based on the municipal valuation of the properties. Some of those costs had to be allocated to the rates expenditure for 2007/8 and that caused the new rates accounts to have increased higher than expected. On the other hand, the Refuse Removal charges reduced and this also reduced the amount of VAT raised on the municipal account.

The only justifiable comparison is therefore to compare the Total Municipal Account (TMA) increase or decrease to determine whether the account increased and by how much. Some of the high increases are caused by huge water consumptions and if this can be managed, those accounts will become more affordable.

If the water consumption is already low, the cause will be due to the high increase in the municipal valuation of the property. If you have objected to the valuation, but the invoice is based on the valuation to which you objected, the account adjustment will be made as from 1 July 2007. The adjustment will be based on a review of the valuation of the property, which may result in a reduction or an increase in the valuation. It is therefore important to be realistic when lodging an appeal. Should you still want to object to the valuation, you should motivate this.

Residents who cannot afford the TMA increases and who lodged objections must please visit any of City Finance's contact centres to make arrangements to pay at least the rates based on the valuation suggested in their objections.

Council recognised the large increases in residential valuations as opposed to other types of properties and increased the residential rebate from 30% to 46%, increased the qualifying monthly household income for the Senior Citizen Rates Rebate by 66% to R5 000 and increased the indigent grant from R20 to R30 per month for all properties valued at R199 000 or less. Residential properties valued up to R300 000 qualify for a reduction in the refuse bin charges, whereas all residential properties receive 6 kl of water per month free of charge and a number of households are managing within that level. Households purchasing on average 400 kWh or less electricity per month, will receive a further 50 kWh per month free of charge.

Households with a total monthly income of R1 740 or less per month can apply for the Senior Citizen Rates Rebate as well as the R30 indigent grant irrespective of whether they meet the age and/or valuation qualifications.

Residents who cannot afford their TMA amount after benefiting from all the above assistance and who cannot reduce consumption of water and electricity any further, should think carefully before putting the property on the market. They should first determine how much they need to borrow to meet the year's municipal charges and by how much the selling price would increase if they delay selling their properties by one year. In most cases, it would make financial sense to hold on to the property for as long as possible as that will give the owner more capital growth than the cost of holding the property. Before taking such important decisions, please seek appropriate financial guidance.


Extract from:
NO. 278/2007
31 JULY 2007

TEL: 021 400 2201

PHONE: 021 400 3575
CELL 084 433 5727

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