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HOW DO I CALCULATE MY MONTHLY RATES AMOUNT?

Category Advice

The City of Cape Town have just published their draft tariffs, fees and charges book with the 2019/2020 rate in the Rand, which relates to property rates.  In this article, we explain how you can use this information to calculate your monthly rates amount from 1 July 2019.

To view the draft booklet follow this link: http://resource.capetown.gov.za/documentcentre/Documents/Financial%20documents/Ann6_2019-20_Tariff%20Fees%20and%20Chargers%20Book.pdf

As a property owner within the Cape Town Unicity, you will by now, be well aware of the latest GV2018 property valuation assigned to your property by the City's Municipal Valuer. It is this property value that will be used to calculate your monthly property tax/rates amount, effective 1 July 2019, hence the importance of you objecting to the value if you are of the opinion that it reflects an inflated market value as at 2 July 2018 (the GV2018 date of valuation).

You will have been paying rates based on your property's GV2015 value for the past (nearly) three years with the only variable being the rate in the Rand multiplier, which is reviewed and applied on 1 July each year. This rate depends  on the City's annual budget requirements. The good news is that the rate in the Rand has been reduced AND the rebate on your residential property's municipal value has been increased to R300 000 (from R200 000), all effective 1 July 2019. The effect of these changes can best be described by way of a practical example:

GV2015

Property type

Municipal value

Less Rebate (R200 000)

Rate in the Rand (2018/2019)

Annual rates

Monthly rates

Residential

R3 000 000

R2 800 000

0.007154

R20 031

R1 669

Commercial

R3 000 000

R3 000 000

0.014310

R42 930

R3 577

GV2018

Property type

Municipal value

Less Rebate (R300 000)

Rate in the Rand (2019/2020)

Annual rates

Monthly rates

Residential

R4 500 000

R4 200 000

0.00555

R23 310

R1 943

Commercial

R4 500 000

R4 500 000

0.0111

R49 950

R4 162

The example above illustrates that, even if your property increased in value by as much as 50% this doesn't translate into an equally large jump in monthly rates. There are only two tariffs, namely residential and commercial, the commercial tariff being applied to all 'non-residential' properties. Ensure that your property is accurately classified on the GV2018 roll to avoid having the incorrect tariff applied to your property.

Consult Steer & Co's valuation division at pauline@steer.co.za or 021 4261026 should you wish to object to your GV2018 provisional value. The deadline for objections is 30 April 2019.

STEER & CO VALUATION DIVISION

Author: Nina Vass

Submitted 02 Apr 19 / Views 889