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Amendment Bill Misunderstood

| News by Staff Reporter

There has been a misunderstanding in the new Amendment Bill, according to Mr Carrim

Yunus Carrim, Deputy Minister of Cooperative Governance and Traditional Affairs said there had been a misunderstanding in the proposed rate hikes on second homes, saying it was only intended for guesthouses and the like.

The Municipal Property Amendment Bill – currently before parliament – proposes that properties not the “primary property” of the owner would be classified as “commercial property”, and therefore subject to commercial property rates.

This would mean an effective doubling of rates on homeowners’ second properties, sparking concern among property investors, homeowners and the property market as a whole.

In an interview with Alec Hogg, editor-in-chief of Moneyweb, Yunus Carrim said there had been a misunderstanding among these various groups as to what the proposed Bill actually meant, adding that people who owned second properties as holiday homes and provisions for retirement would not be subjected to the additional charges.

“It’s absolutely clear to us that we have no intention whatsoever to charge those people, who own more than one house, commercial or business rates on their additional houses,” said Mr Carrim.

“In fact, the intention is to ensure that people who use their residential properties for bed and breakfasts or guesthouses or small hotels, and who are therefore engaging in commercial activity, should clearly therefore be subject to commercial or business rates.”

He said the new Bill was a response to ratepayers who had complained that the original Act (passed in 2004) was in some regards unclear, as well as in response to municipalities who have argued that aspects of the Act are in reality difficult to implement.

Mr Carrim said the Bill’s purpose was to clarify these aspects and make the Act more transparent to the ratepayer and the municipalities, and to provide for more effective and efficient implementation of the Bill.

“If there is a misunderstanding, as there seems to be, we will obviously make amendments to make yet clearer that the intention is to target guesthouses, bed and breakfasts and small hotels but not the second or third home of a house owner,” said Mr Carrim.

People wishing to lodge complaints or comment on the Bill have until Friday 22 July.

Mr Carrim said they are especially keen to hear from people, but did stress that this was the first draft of the Amendment Bill.

Source: www.bizpremises.co.za