HOW DO I CALCULATE MY RATES BASED ON MY NEW MUNICIPAL VALUATION?
Category Advice
With the recent release of the City of Cape Town's GV2022 provisional roll, many property owners will be wondering what this new municipal value means for them. A property's municipal value is the base upon which your annual rates obligation is calculated. We share some tips on how to calculate your annual rates obligation and what the new provisional residential tariff is.
HOW TO CALCULATE YOUR ANNUAL RATES
Your property's municipal value is the basis upon which rates are calculated. Your current (GV2018) municipal value appears on the back of your rates account, and your property rates have been based on this value since 1 July 2019.
Your property's NEW municipal value as appearing on the GV2022 provisional roll will form the basis of your rates obligation effective 1 July 2023. The applicable residential tariff is then applied to the municipal value, which results in your annual rates amount payable to the City of Cape Town. The City's tariff changes annually on 1 July.
RESIDENTIAL REBATE EXPLAINED
All residential properties enjoy a rebate, which reduces the municipal value, thereby lowering the rates obligation. The residential rebate has been R300 000, but will increase to R450 000 from 1 July 2023. This is good news for residential property owners. Unfortunately the bad news is that the R450 000 rebate only applies to residential properties less than or equal to R5 000 000! Properties with a municipal value of more than R5 000 000 will only enjoy a R15 000 rebate.
AN ILLUSTRATION OF HOW THIS NEW REBATE AFFECTS YOUR RATES AMOUNT PAYABLE:
For many residential properties, especially in the City Bowl and Atlantic Seaboard, you will note that your new municipal value is less than your GV2018 value. Our example below illustrates the effect of this new municipal value and tariff on a residential property owner's annual rates obligation. We have used a residential property in the City Bowl as an example:
|
|
GV2018 Value |
GV2022 Value |
|
Municipal Value |
R6 500 000 |
R6 000 000 |
|
Residential Rebate |
R300 000 |
R15 000 |
|
Rateable Value |
R6 200 000 |
R5 985 000 |
|
Residential Tariff |
0,006340 |
0,006273 |
|
Annual Rates |
R39 308 |
R37 544 |
As illustrated above, the tariff is due to reduce (slightly) effective 1 July 2023 and, although the property used in the example has a municipal value of more than R5 000 000, its annual rates obligation is lower than the current rates obligation.
Should you have any queries regarding your property's municipal value or the GV process in general, please don't hesitate to contact us either via email (valuations@steer.co.za) or on 021 4261026.
We have a good library of information relating to the municipal valuation process so please click here for previous blog posts and consider signing up to our blog to stay updated.
For frequently asked questions relating to General and Supplementary Valuations, look at this helpful resource from the City of Cape Town.
Author: Nina Vass