If the City of Johannesburg (“the City”) goes ahead with its proposed tariff hikes based on new property valuations, ratepayers could, in effect, be paying three times the rate of inflation or more.
The city announced that the total value of its new property valuation roll is 12% more than the current roll. According to the city's draft medium-term budget, its income from a 5.3% increase in the property rates tariffs, based on the new higher valuation of properties, will increase the revenue from property rates by 15.8%.
It seems the City has failed to consider the effect of the new higher property valuations to determine the new tariffs. It did not base it on an inflation-related revenue increase from property rates. If they did, they would have seen that they could have reduced the rates tariffs.
The City based the proposed draft on the fact that if the City does not get enough money, there will be more potholes and a further downward slide. The City insists that City Power is losing a significant amount of revenue because people are installing solar.
Keep in mind that Eskom and Rand Water are passing on increases to City Power and Joburg Water, respectively, which these entities have no choice but to pass on as increases to consumers as the City of Johannesburg does not have a surplus to absorb these increases.
With the proposed increase in property valuation, consumers would inevitably see a tariff hike. In this regard, we advise consumers to lodge a dispute at their local municipality in respect of their property valuation in order to decrease the valuation, in that case the rates & tariffs would inevitably decrease as well.
Should you require assistance with navigating through the procedures of lodging the dispute in property valuation at your local municipality, kindly contact our office for legal advice.
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