Lowest property rates and taxes

MOSSEL BAY NEWS - Compared to other towns in the Western Cape, Mossel Bay levies by far the lowest property rates both on residential and agricultural properties.

This is according to a comparison done by the executive mayor of Swartland, Tijmen van Essen, in an address to the Malmesbury Chamber of Commerce on 18 June.

Swartland Municipality and Mossel Bay Municipality compare closely with regards to population statistics, municipal income and other attributes, and are regularly neck-and-neck when compared by ratings agencies such as Ratings Afrika, Good Governance Africa and Municipal IQ.

Comparison
At a discussion at the Malmesbury Chamber of Commerce on 18 June, Van Essen compared the rates and taxes levied by Western Cape municipalities for the 2017/2018 financial year.

Agricultural property
Ratings of agricultural properties valued at

R5 million were used for the comparison. On average,

R8 712 per annum for property tax (or R1 045 per month) was levied.

In the greater Mossel Bay area, agricultural farms valued at R5 million were levied by far the lowest property tax of R3 450 per year.

The Western Cape town where agricultural properties were taxed the highest, was Kannaland (Ladismith), which levied property rates of R16 372 per annum (R1 360 per month). Kannaland levied the highest property rates on agricultural properties in the Garden Route District Municipality.

Second highest in the province was Beaufort West in the Great Karoo, with a tax bill of R16 000 per annum, or R1 360 per month, on agricultural properties of R5 million.

Residential property
For the ratings comparison of residential properties Van Essen used an average home valuation of R2 million.

In the Western Cape, property rates on average in this instance total an average of R15 042 (or R1 254 per month).

Again, Mossel Bay Municipality rates and taxes are the lowest by far. Mossel Bay's property tax amounted to R5 382 per year, or R450 per annum.

Again Kannaland (Ladismith) tops the list of the highest property rates in the Garden Route District Municipality. On residential property of R2m, property rates and taxes amounted to R25 991 (R2 165 per month).

In the Western Cape, Beaufort West levied the highest property rates and taxes in this equation of R31 690 (or R2 641 per month).

Rate increases
As of Monday, 1 July municipal rates and taxes increased for the 2019/2020 financial year. When first the news of a 15% increase in property rates was published, complaints were rife. Few residents even noticed the mere one percent annual increase on the price of water and sewage.

Property rates increased by 15%. The increase in the tariffs for vacant land, both residential and commercial, are marginally higher than the increase in general for property rates.

When Alderman Dirk Kotzé - then the acting mayor - tabled the 2019/2020 budget in April, he stressed that the first R15 000 valuation of any developed residential property, in terms of the Municipal Property Rates Act, was exempted and an additional rebate was granted on the balance of the valuation up to a maximum of R35 000.

No tax on first R50 000
"The owner of a developed residential property will, therefore, not pay any property rates on the first R50 000 of the value of the property," Kotzé said. He added that the municipal manager has been requested to explore the possibility of introducing a medium tariff for large electricity consumers to make investment in Mossel Bay more attractive.

"Likewise, there are ongoing investigations into mitigating measures such as a category tariff to alleviate the plight of farmers especially, who contribute towards food security," Kotzé added.

"The Mossel Bay Municipality's decision to levy higher rate increases on property taxes, as opposed to the significantly lower rate tariffs on service tariffs, results in more of the town's revenue being retained. Property tax is zero rated for VAT and therefore no value added tax is payable to SARS on income tax rates," the municipal manager, Adv Thys Giliomee explained.

"On the other hand, SARS takes the full 15% VAT on income from other service tariffs."

Mossel Bay received the highest score in the Good Governance Africa rating 2019, in which municipalities are judged on the quality of their administrative operations, signs of economic development and effective service delivery (water, sanitation, education, electricity, housing, refuse removal, health facilities and police coverage to their residents).

In 2017/2018 Mossel Bay Municipality levied by far the lowest property rates and taxes on farms in the Western Cape. This is according to a comparison by the executive mayor of Swartland, Tijmen van Essen. Tables: Tijmen van Essen