Cape Town - While the City’s mayoral committee (Mayco) decision to give the green light to the proposed exemption of properties under R5 million from paying rates on the first R450 000 of the property value has been welcomed, the move has also been criticised as coming years too late.
The Mayco further passed a proposal for pensioners and social grant recipients to benefit from rates rebates, by raising the upper qualifying limit from R17 500 total monthly household income to R22 000, with effect from July 1.
Final proposals would be reflected in the City’s 2023/24 budget that will be tabled to council next month for public participation.
“We are increasing the rates exemption for all properties under R5 million. The first R450 000 of the property value will now be rates-free, which represents a major R150 000 increase to this exemption benefit to assist lower- and middle-income ratepayers in the city.
“We are also enabling more pensioners and social grant recipients to benefit from the rates rebate by raising the qualifying limit from R17 500 to R22 000 household income per month. We are making these proposals to city council as a way of easing the pressure on households due to the rising cost of living given the national and global economic conditions,” said mayor Geordin Hill-Lewis.
STOPCoCT founder Sandra Dickson said the increase was “inadequate” at the rate property prices were increasing.
“The increase from R285 000 + R15 000 to R435 000 + R15 000 is by far inadequate and years too late.
Some RDP houses are already valued over R450 000.
“The general increases in valuations of properties and the expected increase in the rate-in-rand factor will largely make one still pay more in 2024 in rates.
The relief the higher rebate threshold will bring is therefore necessary but not a guarantee to lower a homeowner’s rates bill.
“The increase (in the) cut-off, from R17 500 to R22 000, is long overdue and reasonable. However, the amount of red tape for pensioners to qualify for the rates rebate, based on the now-proposed raised income of R22 000 needs to be reduced and simplified.
“Both of these rebates should have been increased in a stepped manner with each year’s budget,” Dickson said.
The GOOD Party in Cape Town welcomed the decision.
GOOD city councillor and finance spokesperson, Anton Louw, said: “These rates relief measures will assist in easing the pressure on ratepayers who are already struggling due to the rising cost of living in the country.
When free basic housing is built in the right location, the value will increase.
“Most basic housing (RDP/BNG) property values are already creeping up to the current threshold, with some housing, such as (in) the Heideveld housing (project), already exceeding the threshold. Without the rates adjustment even a free basic home would not be an affordable home.”
Cape Times