Joburg ratepayers could cough up three times inflation rate with proposed property tariff hikes

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“If the City of Johannesburg wants to act responsibly towards its ratepayers, it should ensure that its planned increase in property rates is in line with inflation and not way above that due to basing the hike on new increased property valuations,” Espach told News24. “The city should use an inflation-linked increase in the revenue from property rates and then calculate the tariff ‘backward’.”

The city announced that the total value of its new property valuation roll is 12% more than the current roll. According to the city’s draft medium-term budget, its income from a 5.3% increase in the property rates tariffs, based on the new higher valuation of properties, will increase the revenue from property rates by 15.8%. 

“In these tough economic times a municipality cannot draft a budget which, in effect, implements a property tariff increase for property owners of three times that of inflation. It seems the City of Johannesburg did not consider the effect of the new higher property valuations to determine the new tariffs. It did not [base it on] an inflation-related revenue increase from property rates. If they did, they would have seen that they could have reduced the rates tariffs.”

Espach points out that the city indicates in its draft budget that its income from water and electricity is under pressure.

“It would, therefore, seem as if the city sees property rates as a cash cow, which is not fair to property owners,” says Espach.

Read the full article on News24 here.

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