21 February 2007
Rates Shock On The Way?
A colleague of mine who lives in the far Northern Suburbs told me he got a letter from his council telling him that his house has been appraised at a new higher value and as such his rates are about to increase dramatically. And by dramatically I mean at least double. Can anyone else confirm this?
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7 comments:
Yes, a relative in Goodwood has had her valuation increased by 200% from the last one done in 2003. But given the shakeup in the market in these past few years, that sounds fair. There is a channel whereby you can lodge an objection.
Thanks for the info. My colleague seems to think the percentage of his valuation that will be charged each year will drop. That is instead of being charged 1% of R600 000 he'll be charged 0.6% of R1 000 000. Somehow I don't share his optimism.
The way see it, they have worked out that in Cape Town the total value of all property has increased 3.5 times since 2000 (yes, 350% in 6 years !!!! ... just don't tell me there is no Bubble). If everyone's house had increased 3.5 times in value then all rates would remain the same. However If your home has increased by more than 3.5 times then your rates will increase and those where their prices have say, only doubled, will pay less.
All these people who homes have increased by millions and are now moaning that they have to pay a bit more rates ... here's an idea, sell the house and rent like the rest of us !!! Here's another idea, increase the bond and access that huge price increase to pay for the rates. Someone sitting on a big fat unearned piece of equity complaining they have no cash to pay for the rates has absolutely no sympathy from me...
CJ: It does have some affect on people who have been living in their houses for years and have no intentions of selling but who's incomes have not kept pace with housing price growth. Now suddenly they have to pay an extra R10 000 a year which might be a significant chunk of their discretionary spending.
Despite not being specuvestors or buying or selling in years the housing boom is still going to wind up costing them money.
I can't afford to live in their house because its value has increased by millions - a fact I am sure they are quite happy to boast about at dinner parties -- so I have no sympathy for them when they plead poverty when it comes to higher rates- they can easily assess that increase with a bond that can be paid off when they finally move. I can't afford to pay the high prices - if they can't afford to to live up to their new found wealth they must move to a cheaper area - it is only when people start getting squeezed that property prices will start coming down to reasonable levels.
It's a bit harsh to say to a little old lady who has been living in Sea Point for 50 years and has a fixed income that she must move if she "can't afford to live up to her new found wealth"...
She is sitting in a R 4m asset - 3m of that was given to her free over the last 6 years for doing absolutely NOTHING - if she gets a bond to access R10,000 of that asset a year to pay the rates her problem is over - she could do that every year for the next 20 years and still won't feel it - all that will happen is when she dies, her kids will get a bit less out for the house when it is sold because the outstanding bond needs to be paid.
I am sorry, but pleading poverty when your house has just quadrupled in price over 6 years doesn't work for me.
Everyone is a casualty in this crazy property bubble, first time buyers, people who want to upgrade to a bigger house but can't afford to, and little old ladies whose rates have gone up ...
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