Rates Calculations Explained – What you will pay from 1 July



Rates Calculations Explained The calculation of your rates and services bill is fairly complex. It is broken down into three separate calculations as follows: Rates The rates that you will pay are calculated on a "Cents in the Rand" figure which is based on a tariff of 1.4 cents in the Rand, with a 30% rebate for all property owners, which reduces the total to 0.98 Cents in the Rand. The new rates policy also allows for a further rebate in the form of a R50 000 rates free portion of the improved value of your property. This means that rate payers who own properties with an improved valued of R50 000 or less will effectively pay no rates. To calculate your rates, you apply the following formula: · Improved Value of Your Property - R50 000 x 0.0098 = Annual Rates Bill For example (R250 000 - R50 000) x 0.0098 = R1 960.00. · Divide this figure by 12 to arrive at your Monthly Rates Bill R1 960.00 / 12 = R163.33 per month. Rates do not attract VAT. Refuse Removal This calculation is similar to the Assessment Rate calculation, as the cost of this service has also been tied to property value at the rate of 0.38 Cents in the Rand. There is a basic charge of R38.60 per month for residential properties where the new 240 litre wheelie bins are used, or R33.60 per month for removal of black plastic bags. Again, the R50 000 deduction from the improved value of the property has been allowed, which means that rate payers who own houses with an improved value of R50 000 or less, will effectively pay only the basic charge noted above. This amounts to a 100% rebate. Properties with a valuation of less than R100 000 but more than R50 000 will enjoy a 50% rebate and will therefore pay only half of the amount. To calculate your refuse removal charges, you apply the following formula: · Improved Value of Your Property - R50 000 x 0.0038=Annual Refuse Removal Bill For example (R250 000 - R50 000) x 0.0038 = R760.00. · Divide this figure by 12 to arrive at your Monthly Refuse Removal Bill R760.00 / 12 = R63.33 per month. · To this you must add either R33.60 or R38.60 depending upon the method of refuse removal in use at your property. In this example we assume black bag removal, therefore the monthly Refuse Removal Bill will be: R63.33 + R33.60 + VAT @14% = R110.50 per month. Sewage Tariffs This calculation is somewhat more complex, as it has been tied to water consumption. Apparently, the belief is that the bulk of water used in a residential property ends up going down the sewer, what is know as "grey water", which must be treated. There is a basic charge of R38.00 per month, to which a sliding scale of rebates applies based on the improved value of your property. The rebates are as follows: R0 to R50 000 -- R38.00 R50 001 to R75 000 -- R33.00 R70 001 to R100 000 -- R31.00 R100 001 to R300 000 -- R28.00 R300 001 to R600 000 -- R23.00 R600 001 to R1 000 000 -- R11.00 R1 000 001 to R1 500 000 -- R8.00 To this figure must be added a three step tariff calculated on 70% of the water consumption of a property, up to maximum of 35kl, plus VAT. The capping at 35kl is apparently to accommodate property owners with high monthly water consumption due to swimming pool maintenance and watering of gardens. ·The first 4.2kl of water consumption attracts no tariff. ·From 4.2kl to 14kl, the tarrif is R2.04 per kl. ·From 14.kl to 35 kl the tarrif is R3.25 per kl. Residential properties with an improved value of R100 000 or less will enjoy an additional monthly subsidy of R20.00 per month as a contribution towards water and sanitation charges. To continue with the above example: Improved Value of R250 000 = Rebate of R28.00. This gives a basic charge of R10.00. Assuming the monthly water consumption of the property averages 38kl, the calculation is as follows: ·70% of 38kl = 26.60 kl (70% of monthly water consumption attracts sewage tariff) ·0 to 4.2 kl @ R0.00 per kl = R0.00 (The first 4.2kl of water consumption attracts no tariff) ·4.2kl to 14kl = 9.8kl x R2.04 per kl = R19.99 (The next 9.8kl attracts a tariff of R2.04 per kl) ·14kl to 35kl = R12.60 x R3.25 per kl = R40.95 (The next 21 kl attracts a tariff of R3.25 per kl) This is what the total charge consists of: R00.00 first 4.2kl R19.99 next up to 9.8kl R40.95 next up 14kl R10.00 Basic charge R70.94 R+9.93 VAT @ 14% R80.87 Total Monthly Sewage Bill So what is the total monthly bill? Continuing with the example, the total monthly bill for rates and services is: R163.33 Assessment Rate R110.50 Refuse Removal R+80.87 Sewage Tariff R354.70 Total Monthly Rates and Services Bill. The Objection Process You will by now have received a valuation notice from the city of Cape Town advising you of the value of your property as it appears on the Provisional Valuation Roll. If you have not yet received a notice, I suggest that you contact Mr Emil Weichardt, The City Valuations Manager. You can either telephone him on (021) 40011 11 or e-mail him on lweichar@cct.org.za. Property owners who feel that the valuation which appears on the Provisional Valuation Roll of the Cape Town City Council is incorrect are entitled to lodge an objection. The cut off date for the lodging of objections is 28 June 2002. Each objection will be considered by one of the planned five Valuation Boards which commence hearings during August 2002. In the meantime, you are expected to pay for rates and services based on the valuations on the new Roll in accordance with the new tarrif structure as from 1 July 2002. If you have visited one of the Inspection Venues around the UniCity (Strand Library Hall for the Helderberg Basin) you will no doubt have verified your valuation, and perhaps collected an objection form and its accompanying Objection Process Guidelines. This document states that "Whilst the City Council cannot assume the role of advisor to property owners wishing to submit objections to valuations, it is aware of the difficulty confronting property owners in dealing with this process." I fundamentally disagree with this stance. In my opinion, the City Council is morally obliged to render every possible assistance to property owners who wish to lodge an objection. After all, we the rate payers, have footed the bill for this exercise, with the apparent intention that it will be of benefit to all of us. According to City Council, the process must result in a fair and equitable rates policy across the UniCity. The extent of discrepancies which are apparent in the valuations on the Roll indicate that it might well be anything but fair and equitable. I urge you to insist that your local authority assist you with the formulation and lodging of your objection and do not give up until you have recieved the assistance to which I believe you are entitled. What might be wrong with your valuation? In considering your new property valuation on the Provisional Roll there are a few things you need to bear in mind. Valuation Date According to the Property Valuation Ordinance, 1993, section 15(2) the date of valuation is as at 1 January 2000. It is a snapshot, not a period of time, therefore you must ask the question "Is this valuation a fair reflection of what my property was worth on 1 January 2000?". Have you improved your property? If for example, you have had alterations done since 1 January 2000, then these alterations cannot be taken into account when valuing your property. A case in point is my own experience. I did fairly extensive alterations to my property during the period November 1999 to May 2000. when I inspected the entry on the Provisional Valuation Roll on the Property Valuation Project Web Site during the informal review process, it clearly stated that the total value of improvements done during that period had been included for valuation purposes. Thus, the valuation date of my pr