Joburg proposes above-inflation tariff increases

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Residents of the City of Johannesburg will see a substantial increase in the cost of municipal services from 1 July if the draft medium-term budget tabled in council last week is anything to go by.

With exception of property rates, the tariffs for all main services increase by a rate equal to or more than that of inflation, which is currently at 7%.

The increase in property rates of 5.3% however comes on the back of a new general valuation roll that is, in total, valued at 12% more.

(The city has  extended the 31 March deadline for objections to the new valuation roll to 5 May.)

In addition, the draft budget contains a proposal to decrease the discount on the rebate for residential property from R350 000 to R300 000.

This, according to Ben Espach, director for valuations at Rates Watch, may result in a considerably higher effective increase for individual property owners.

“According to the draft budget the projected increase in the city’s revenue from property rates is 15.8%. Although the increase in the tariff [5.3%] is below the CPI [consumer price index], the effect of the new valuation roll was not considered when the new tariffs were determined.

“The property rates tariffs should have been based on an inflation-related increase in the revenue from property rates,” he adds, saying that would most likely have resulted in a decrease in the tariffs.

“There is good and bad news for pensioners,” says Espach.

Read the full article on Money Web here.

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