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The “continuous and excessive hiking of rates and taxes” in key metropolitan municipalities in the decade to 2021 is “unsustainable for the country’s property industry”.
This is according to findings mapped out in a study commissioned by the South African Property Owners Association (Sapoa).
The purpose of the study, according to Sapoa’s outgoing president Malose Kekana, was to look at the socioeconomic impact of rates and taxes across different municipalities in the country. Kekana is also the CEO of unlisted property major Pareto, which owns mega malls like Menlyn Park in Pretoria, The Pavilion in Durban, and a stake in Sandton City in Johannesburg.
A presentation delivered by Kekana at the Sapoa Annual Convention in Sun City this week notes that based on the study’s findings, the hikes have had a negative impact on growth and employment in the industry.
The association says it has taken steps to meet with city administrations in Cape Town, Johannesburg, Tshwane, eThekwini and Nelson Mandela Bay “to start the consultation process required by the applicable legislation,” to work towards a solution.
This comes after municipalities such as eThekwini have in recent months been subjected to the ire of ratepayers disputing massive hikes in rates and taxes while service delivery has remained poor.
Sapoa has spoken out before and taken action against rate hikes in major metros.
Most recently, Moneyweb reported on the association’s joint efforts with JSE-listed property and private memorial parks developer Calgro M3 to challenge the eThekwini municipality’s decision to implement a 100% increase in the rand rate charged on vacant land.
The two parties say the metro’s rate charge is significantly higher than those of other metropolitan municipalities. This, according to Sapoa, will have a dire impact on property values in eThekwini and will ultimately slow development and growth in the metro as investors will regard it as less able to generate acceptable returns.
Read the full article on MoneyWeb here.