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Two Properties, Double Rates| News by Staff Reporter
The new Bill currently before parliament threatens to further weaken property prices
The Municipal Property Amendment Bill, recently proposed to parliament, seeks to charge commercial rates on any property deemed not the “primary property” of the owner, which may result in a further drop in house prices.
The new Bill redefines “residential property” as the owner’s “primary property”, meaning any holiday home or investment property being rented out would be classified as “commercial property” and the rates would be doubled.
Should the new Bill be passed there may be huge ramifications for the property industry as it would lead to a sharp decline in property investments and a decrease in the number of additional properties bought for retirement or holiday purposes.
This decrease in market activity would in turn lead to a further decrease in the average house price – bad news for a market already dealing with weak prices due to households’ overindebtedness, oversupply and high inflation.
Earlier this month FNB property analyst Ewald Kellerman said residential property prices were already in negative territory and were expected to remain marginally negative before improving towards the end of the year.
To make the matter a more critical one, however, local residents’ associations, estate agents and other investors have just one week to lodge their objections to the legislation that will impact the property market throughout the country.
To lodge a complaint regarding the legislation, email email@example.com or send a fax to 012 334 4811.