PRESENTATION ON DA PROPOSALS FOR

1
PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG OCTOBER 2007

• INTRODUCTION
• THE MUNICIPAL PROPERTY RATES ACT (ACT 6 OF 2004)
• REQUIRES EACH MUNICIPALITY TO DRAW UP A RATES
• POLICY . ( Chapter 2 , part 1 , 3. (1) to (6)
  )
• THE COUNCIL OF A MUNICIPALITY MUST ADOPT A
  POLICY
• CONSISTENT WITH THIS ACT ON THE LEVYING OF RATES
  ON
• RATEABLE PROPERTY IN THE MUNICIPALITY .
• THE POLICY TAKES EFFECT ON THE EFFECTIVE DATE OF
  THE
• FIRST VALUATION ROLL PREPARED IN TERMS OF THE
  ACT
• THE EFFECTIVE DATE FOR JOBURG HAS BEEN
• DETERMINED AS 1ST JULY , 2008

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• THE RATES POLICY FOR JOBURG WAS APPROVED FOR
• RELEASE FOR PUBLIC COMMENT IN JUNE , 2007 .
• THE CLOSING DATE FOR PUBLIC PARTICIPATION AND
• COMMENT ON THE RATES POLICY IS THE 31ST OCTOBER
  , 2007
• THE RATES POLICY WILL BE SUBMITTED TO COUNCIL FOR
  
• APPROVAL AND FORMAL ADOPTION IN JANUARY , 2008
• THE INPUTS RESULTING FROM PUBLIC PATICIPATION
  WILL
• BE CONSIDERED AND INCORPORATED WHERE RELEVANT
• THE RATES POLICY MUST BE REVISED ANNUALLY AND
• CONSIDERED WITH THE DRAFT BUDGET EACH YEAR

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• JOBURGS RATES POLICY
• THE INTENTION OF THE RATES POLICY IS TO
• BE READ IN CONJUNCTION WITH THE ACT
• SHOW THE WAY IN WHICH COUNCIL IS INTENT ON
• IMPLEMENTING THE ACT AND LEVYING RATES
• BE A LEGAL DOCUMENT TO BE USED IN LITIGATION
• BE SUPPORTED BY BY-LAWS WHICH ARE THE
• ENFORCEMENT TOOLS FOR RATES LEVIED IN TERMS
  OF
• THE ACT AFTER 1ST JULY, 2008

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• OBJECTIVES OF RATES POLICY
• THE POLICY DESCRIBES AND PROVIDES
• CRITERIA FOR CATEGORIES OF PROPERTY
• CATEGORIES OF OWNERS
• MANNER OF DEALING WITH MULTIPLE USE PROPERTIES
• CRITERIA FOR DETERMINATION OF REBATES ON VARIOUS
• CATEGORIES OF PROPERTY
• DETERMINATION OF IMPACT OF REBATES ON
• OVERALL RATES REVENUE

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• PRINCIPLES INFORMING RATES POLICY
• RATES PROPERTY ON MAXIMUM POTENTIAL RIGHTS
• ENCOURAGES DEVELOPMENT OF VACANT LAND
• BENEFITS RESIDENTIAL LAND OWNERS WHERE VALUE
• BELOW THRESHOLD AT WHICH RATES COMMENCE
• ADDITIONALLY BENEFITS RESIDENTIAL OWNERS WITH
• VALUE BELOW THRESHOLD THAT HAVE CONSENT USE
• PROVIDES RATES BURDEN FOR AGRICULTURAL HOLDINGS
• EXCEEDING 10 000 SQ. M. SLIDING SCALE
  REMOVED

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• CREATES BURDEN FOR TRUSTEES OF PRIVATE SCHOOLS
• AND CLUBS
• ENCOURAGES MIXED USE DEVELOPMENTS IN SPECIFIED
• AREAS
• SUPPORTS LAND DEVELOPMENT OBJECTIVES OF CITY
• PROMOTES DENSIFICATION OF RESIDENTIAL
• ACCOMMODATION THROUGH REBATES FOR CERTAIN
  TYPES
• OF ACCOMMODATION
• PROVIDES STRATEGIES FOR PHASING IN OF RATES ON
  NEWLY
• RATED PROPERTIES AND RATES INCREASES ABOVE
• PREDETERMINED LEVEL

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
6. ANNUAL OPERATING BUDGET (2) RATES INCREASE
MUST BE USED FOR FINANCING INCREASE IN
OPERATING COSTS OF SERVICES AND FACILITIES (3)
IN DETERMINING INCREASE IN RATES CRITERIA TO BE
APPLIED (DA PROPOSES INSERT MAY) INCLUDE
a) INFLATION RATE - CPIX b) FINANCING
OF INCREASED OPERATING EXPENDITURE c)
FINANCING OF INCREASED MAINTENANCE EXPENDITURE
d) FINANCING INCREASED DEPRECIATION CHARGES
e) ADDITIONAL COST OF SERVICING DEBT f)
AUGMENTATION OF ANY REVENUE SHORTFALL g)
FINANCING OF ANY EXPENDITURE RELATED TO ANY
ACTIVITY COUNCIL CAN LAWFULLY UNDERTAKE

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
h) NATIONAL TREASURY DETERMINED MEDIUM TERM
BUDGET GROWTH FACTORS (4)(a) DIFFERENTIAL
RATES MAY BE LEVIED ACCORDING TO
PERMITTED (ZONING) OR ACTUAL USE OF PROPERTY
(MAY BE ILLEGAL USE) (b) CRITERIA TO BE
CONSIDERED IN DETERMINING IF
DIFFERENTIAL RATES TO BE APPLIED i)
NEED TO PROMOTE ECONOMIC DEVELOPMENT ii)
ANY ADMINISTRATIVE ADVANTAGE iii) NEED TO
ALLEVIATE RATES BURDEN ON OWNERS OF
ANY PARTICULAR CATEGORY OF PROPERTY
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
(5) RATES AND VALUATION RATES LEVIED AS AN
AMOUNT IN THE RAND BASED ON THE MARKET
VALUE OF ALL RATEABLE PROPERTIES REFLECTED
IN VALUATION ROLL ( SECTIONAL TITLE UNITS
RATED INDIVIDUALLY) 7. CATEGORIES OF PROPERTY
FOR LEVYING DIFFERENTIAL RATES a)
BUSINESS , COMMERCIAL AND INDUSTRIAL b)
RESIDENTIAL PROPERTY c) RESIDENTIAL
PROPERTY WITH CONSENT USE d) MUNICIPAL
PROPERTY NOT RATEABLE e) MUNICIPAL PROPERTY
RATEABLE f) STATE OWNED PROPERTY g)
FARMING LAND USED FOR BONA FIDE FARMING
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
h) PUBLIC SERVICE INFRASTRUCTURE i) PROPERTY FOR
MULTI PURPOSE USE j) AGRICULTURAL HOLDINGS USED
FOR AGRICULTURAL PURPOSES k) VACANT LAND
IRRESPECTIVE OF ZONING l) MINING PROPERTY ANY
PROPERTY NOT FALLING INTO ONE OF THE CATEGORIES
LISTED ABOVE WILL BE DEEMED TO BE BUSINESS ,
COMMERCIAL AND INDUSTRIAL FOR THE LEVYING OF
RATES NB PROPERTY USED IN CONFLICT WITH ZONING
WILL BE RATED AT TARIFF APPLICABLE TO BUSINESS ,
COMMERCE AND INDUSTRIAL
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
9.CATEGORIES OF OWNERSHIP FOR EXEMPTIONS ,
REDUCTIONS AND REBATES IF DIFFERENTIAL
RATING APPLIED (AND PROPOSED REBATES) a)
NATURAL PERSONS WHO OWN AND OCCUPY RESIDENTIAL
PROPERTY WHO HAVE LIMITED INCOME NOT
PENSIONERS BUT CAN PROVE ANNUAL INCOME BELOW
LIMIT DETERMINED BY COUNCIL FROM TIME TO
TIME MAX PROPOSED REBATE 75 OF CURRENT
RATES b) NATURAL PERSONS WHO OWN AND OCCUPY
RESIDENTIAL PROPERTY WHO DEPEND ON STATE
SOCIAL GRANT i .t.o. SOCIAL ASSISTANCE ACT
(NO.59 1992) - HOUSEHOLD INCOME MUST NOT
EXCEED 2X STATE GRANT PLUS R1 MAX PROPOSED
REBATE 100 OF CURRENT RATES c) PENSIONERS WHO
OWN AND OCCUPY RESIDENTIAL PROPERTY WITH
INCOME NOT EXCEEDING LEVEL PREDETERMINED BY
COUNCIL MUST BE 60 YEARS MAX PROPOSED
REBATE 75 0F CURRENT RATES
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• NB - CONDITIONS APPLICABLE TO RESIDENTIAL
  PROPERTIES
• VALUE OF PROPERTIES REFERED TO IN a),b) AND c)
  ABOVE MUST NOT EXCEED A LIMIT DETERMINED BY
  COUNCIL AT THE INCEPTION OF THE VALUATION ROLL -
  APPLICABLE FOR DURATION OF ROLL (NO FIGURE
  PROPOSED DA R1M)
• OWNERS MUST APPLY FOR REBATE ON PRESCRIBED FORM
  ACCOMPANIED BY COPY OF SOCIAL SECURITY CARD, TAX
  ASSESSMENT OR ACCEPTABLE PROOF OF INCOME
• REBATE GRANTED FOR MAXIMUM PERIOD OF 2 YEARS
  PROVIDED STATUS OF BENEFICIARY DOES NOT CHANGE
  RE-APPLY AFTER 2 YEARS
• NO RETROSPECTIVE REBATES WILL BE GRANTED -
  APPLICATIONS MUST BE SUMITTED BY 1 SEPTEMBER 2008

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
d) ORGANISATIONS WHICH CARE FOR AGED AND OWN
PROPERTY USED FOR THIS PURPOSE MAX
PROPOSED REBATE 100 0F CURRENT RATES e)
INSTITUTIONS WHICH OWN PROPERTY AND PROVIDE
EDUCATION AND/OR STUDENT ACCOMMODATION AT
i) PUBLIC SCHOOLS PROPOSED 50 - (DA
80) ii)
PRIVATE SCHOOLS PROPOSED 50 - (DA 80)
iii) UNIVERSITIES PROPOSED 20 -
(DA 75) iv) TECHNICAL AND OTHER COLLEGES

PROPOSED 20 - (DA 75) f) PUBLIC BENEFIT
ORGANISATIONS (i.e. sect. 30 INCOME TAX
ACT 1962) WHICH OWN PROPERTY MAX
PROPOSED REBATE 100 g) PRIVATE SPORTS
CLUBS WHICH OWN PROPERTY USED SOLEY
FOR SPORTS ( DA PROPOSES AND/OR
RECREATIONAL AND/OR CULTURAL) PURPOSES
MAX PROPOSED REBATE 20 - (DA 75)
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
h) OWNERS OF PROPERTY IN INNER CITY WHICH WAS
RE- ZONED FOR RESIDENTIAL PURPOSES AFTER 1ST
JULY , 2001 PROPOSED REBATE 40 i)
RELIGIOUS COMMUNITIES IN WHOSE NAME PROPERTY IS
REGISTERED AND USED PRIMARILY AS A PLACE OF
PUBLIC WORSHIP PROPOSED REBATE 100 j)
OWNERS OF HERITAGE SITES PROPOSED REBATE 20

(DA 50) k) STATE OR ORGAN
OF STATE OWNING PROPERTY
PROPOSED
REBATE 20 l) OWNERS OF PROPERTY USED FOR BONA
FIDE FARMING CONDITIONAL - PROPOSED
REBATE 55 (DA 75) m) OWNERS OF RESIDENTIAL
PROPERTY WITH MARKET VALUE BELOW THRESHOLD
PROPOSED REBATE 100
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
n) PROPERTY OWNED BY MUNICIPALITY NO PROPOSAL
(SPECIFIED AS RATEABLE OR NON-RATEABLE) o)
PROPERTY REGISTERED IN NAME OF INSTITUTION OR
ORGANISATION WITH EXCLUSIVE OBJECTIVE OF
PROTECTION OF ANIMALS NO PROPOSAL (DA 75)
p) PROPERTY FOR ACCOMMODATION OF MORE THAN
SPECIFIED NUMBER OF DWELLING UNITS PER ERF AS
CONTEMPLATED IN TOWN PLANNING SCHEME
PROPOSED REBATE 25 NB THE ABOVE MAXIMUM
REBATE PROPOSALS APPLY TO CATEGORIES OF
OWNERS WHEN DIFFERENTIAL RATES ARE
LEVIED FOR DIFFERENT CATEGORIES OF
PROPERTY
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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• NB CERTIFICATE OF OCCUPANCY
• 11 . TO QUALIFY FOR THE RESIDENTIAL RATE OR
  REBATE A
• RESIDENTIAL PROPERTY MUST HAVE BEEN
  INSPECTED
• BY COUNCIL AND BE ISSUED A CERTIFICATE OF
  
• OCCUPANCY. PROPERTIES RATED AS
  RESIDENTIAL
• PRIOR TO 30TH JUNE 2008 ARE EXCEMPTED .
• REBATES IF UNIFORM RATE LEVIED
• ONE WOULD EXPECT THAT THE COUNCIL WOULD
  HAVE
• MADE SPECIFIC PROPOSALS FOR REBATES FOR
• RESIDENTIAL PROPERTIES IN THE SITUATION
  WHERE A
• UNIFORM RATE IS LEVIED . INSTEAD COUNCIL
  STATES
• THAT THE REBATES FOR RESIDENTIAL
  PROPERTIES
• WOULD BE A PERCENTAGE OF CURRENT
  MONTHLY
• RATES TO BE DETERMINED BY THE COUNCIL
  (NOT
• ACCEPTABLE TO DA)

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• THE PROPOSED REBATES FOR OTHER CATEGORIESOF
  OWNERS REMAINS THE SAME AS IN THE CASE WHERE
  DIFFERENTIAL RATES ARE LEVIED DA PROPOSALS AS
  ABOVE
• 13. COSTS AND BENEFITS
• COSTS AND BENEFITS OF PHASING-IN , REBATES
  ,
• REMISSIONS AND EXCLUSIONS TO COMMUNITY MUST
  BE
• REPORTED IN THE ANNUAL OPERATING ESTIMATES
  OF
• COUNCIL
• 14. ILLEGAL USE OF PROPERTY
• UPON THE ISSUE OF A COURT ORDER PERTAINING
  TO THE
• ILLEGAL USE OF A RESIDENTIAL PROPERTY ANY
  REBATE
• IS FORFEITED . APPLICATION CAN BE LODGED
  FOR RE-
• INSTATEMENT .

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• PHASING IN OF RATES
• COUNCIL MAY CONSIDER THE PHASING IN OF
  NEWLY
• LEVIED RATES OR RATES INCREASES ABOVE A
• PRESCRIBED AMOUNT (DA PROPOSES 25)
• RATES CURRENTLY PAID VIA THE LEVY IN
  SECTIONAL
• TITLE DEVELOPMENTS ARE DEEMED TO HAVE BEEN
  PAID
• PRO-RATA BY OWNERS (THEREFORE OWNERS WILL
  NOT
• BE DEEMED TO BE NEWLY RATED ) DOES
  APPROVED
• SCHEME NOT ALLOCATE RATES ON SPECIFIED
  BASIS?)
• 16. LIABILITY FOR RATES (NO QUID PRO QUO)
• OWNER OF PROPERTY LIABLE FOR PAYMENT OF RATES
• RATES ONLY PRESCRIBE AFTER 30YEARS
• JOINT OWNERS JOINTLY AND SEVERALLY LIABLE
• RATES CAN BE RECOVERED FROM AGENT/TENNANT OF
  
• RATEPAYER/OWNER

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG

• 18. VALUATION ROLL INSPECTION / OBJECTION
• COUNCIL MUST GIVE NOTICE THAT ROLL OPEN FOR
• INSPECTION .
• ANY PERSON MAY LODGE OBJECTION WITH CITY
• MANAGER WITHIN PRESCRIBED TIME
• OBJECTIONS MUST BE SPECIFIC TO A PROPERTY
• LODGING OF OBJECTION DOES NOT DEFER LIABILITY
  FOR
• PAYMENT OF RATES
• SUMMARY
• THE DA BELIEVES THAT THE RATIO OF REVENUE
  CURRENTLY RECEIVED FROM RESIDENTIAL PROPERTIES
  COMPARED TO TOTAL INCOME FROM ALL RATES SHOULD BE
  RETAINED UNDER NEW ACT FOR AT LEAST 4 YEARS

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PRESENTATION ON DA PROPOSALS FOR RATES POLICY -
JOHANNESBURG
THE DA PROPOSES THAT THE PRESCRIBED LEVEL
(VALUATION) AT WHICH RATES SHOULD COMMENCE SHOULD
BE SUBSTANTIALLY INCREASED FROM THE CURRENT LEVEL
OF R20 001 (POSSIBLY BY FACTOR OF 6 TO 8) TO
R120 000 T0 R160 000 THE DA PROPOSES THAT
THE INITIAL R15 000 OF VALUE OF RESIDENTIAL
PROPERTIES THAT IS NOT RATED BE INCREASED
TO 50 OF THE COMMENCEMENT VALUE FOR RATING (AS
PROPOSED ABOVE) THE PROPOSALS ON REBATES ,
ETC. DETAILED IN THE PRESENTATION WILL BE
INCLUDED IN THE DA PROPOSALS ON THE RATES
POLICY TO BE SUBMITTED TO THE CITY MANAGERS
OFFICE
THANK YOU !