sectional title unit rates to skyrocket
26 November 2007

MD Andrew Schaefer said sectional title homeowners would have to be rated at between 25% and 40% of ordinary residential owners to avoid such a rate increase. Sectional title bodies corporate were rated on the value of the property‘s commercial buildings on single stands with unit owners paying a portion of the rates as part of their levies.

The new Rates Act stipulates that municipalities must value and rate sectional title units individually. In Johannesburg, mayor Amos Masondo has agreed to charge sectional title homeowners less than regular homeowners. This was being done to encourage high-density living through sectional title development.

“Cape Town charges its single residential and sectional title homeowners 0,00495 cents in the rand after it has applied a 35% rebate for residential property,” Trafalgar said.

“Johannesburg will charge single residential owners 0,005 cents. It is still holding public meetings with sectional title owners to determine the best rate.”

Kobus Theron, a portfolio manager at Compeg Sectional Title Managers, said he believed rate increases would vary from building to building and would depend on the area and valuation of the property.

Shaefer said that the City of Johannesburg was “smart” to rate sectional title owners differently as this would promote densification, “it will be rewarded by more rapid densification and, of course, more votes from a category of ratepayer that is likely to be the majority in most cities in the next few decade,” he said.

He believed rates alone would not have an influence on sectional title property ownership as these properties offered added security.

Sapa,  www.theherald.co.za