A look at the Cape Town property market.
Legalbrief quote :" The NEW Property Rates Amendment Bill will compel those who own more than one home to pay commercial rates for their additional properties. In effect, anyone who has a holiday home or a dwelling occupied by tenants, would see their property rates bill double and would lose their rebate on that second property." unquote.I don't see tenants absorbing the whole increase, perhaps 1/2 the landlord and 1/2 the tenant.OR perhaps THIS will bring a flood of extra homes onto the market, thereby deflating prices hugely, thereby AT LAST allowing first time home buyers to find an AFFORDABLE primary residence.There is an obscene case in Sea Point, of one person(through a trust), owning, and thus monopolizing, over 500 apartments.What this means is that 499 families are forced to rent,as this person will not sell a flat except at an exhorbitant price.This bill will level the playing field for first time buyers.It will make it "financially unattractive" for property barons to hold onto all those properties.My 2c worth.
I would assume most landlords will try and pass on the costs in the form of increased rent.However if they've signed a lease with an agreed upon escalation then they should be out of luck.
Landlords will simply increase rent. They will certainly try and do that before selling, so I doubt we will see a huge increase in stock on the market unless there already is a huge excess of rental properties out there. In my experience that's not really the case, so tenants will pay, resulting in the gap between renting and buying being reduced? That's the flip-side of the coin, it could make it "financially unattractive" for people to rent.
Does this bill only apply to natural persons or to other legal entities such as trusts? I can bet you that Mr 500 Seapoint properties has the legal know how to skate around this while the average Joe will get screwed over.
MUNICIPAL PROPERTY RATES AMENDMENT BILLto provide for the Minster to make adecision in terms of section 16(5) with the concurrence of theMinister of Finance; to provide for the exclusion from rates ofcertain categories of public service infrastructure as well asmining rights or mining permits, excluding infrastructure abovethe surface in respect of mining property; to provide that theexclusion from rates in respect of land belonging to a land reformbeneficiary is extended to the spouse and dependants; to providethat an exclusion from rates in respect of the seashore lapses if any part thereof is alienated; to provide that a municipality maynot levy a rate on the first amount of the market value asdetermined by the Minister with the concurrence of the Minister ofFinance of a residential property owned and occupie~ by arecipient of an older persons grant or a disability grant; to provide that a municipality may levy different rates on residentialproperty not used for the permitted purpose or not used for anypurpose; to provide that a municipality may levy different rates onvacant property;
Could someone please translate the legalese above for the hoi palloi? I've read it a few times but as per all law documents I can't really make sense of what it's saying, am I missing another section i.e. 16(5)?
@Anon above sure, let me try:If you are presently advantaged, have been given land for free by the gov or someone who aligns with the gov, is a mining mogul, or is old and can't work but does own land due to any reason above - you don;t pay rates. For everybody else, you pay double.
I'm a bit curious to how landlords are going to just 'pass on the cost' to the tenants. Surely it goes into the cost of owning a buy-to-let, but like all free markets there is a price people are prepared to pay for a product.Thus, if it ever does come through the lawmaking process, I see it increasing the cost of renting only slightly at first.
Whats interesting is how the MOPE [Management of Perspective Economics] has backfired. The whole get rich quick in property mentality coupled with the constant talking up of the property market, which is actually clearly in a huge downturn, has set it in the governments desperate for more revenue sights.As for passing on the cost to an already cash strapped consumer? Perhaps eventually over a number of years but not in the short term no. People dont just pay up, because they generally arent in the position to award themselves salary increases [hello real world]. They downsize, move in with parents, houseshare, default etc.Perhaps this is the black swan that kicks the SA property market into the final leg of the classic bubble graph: the downward leg.
This might be the "black swan that kicks the SA property market into the final leg of the classic bubble graph: the downward leg", who knows?But one thing we do know is that it will happen, and if this isn't it well then we wait for the Real Thing to appearAnd appear it will - it is not "different here" in RSA
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