Polokwane Acknowledges Property Industry's Concerns

Neil Gopal CEO of SAPOA

The SA Property Owners Association (SAPOA) is applauding the City of Polokwane for approving a new rates policy that takes into account key concerns raised by SAPOA during the required consultation process.

The City of Polokwane approved its Rates Policy for 2014/15 on 26 June 2014.

“SAPOA is pleased to see that the City of Polokwane has taken into consideration the input provided by SAPOA on the draft rates policy. SAPOA engaged extensively with the City of Polokwane for several months and this has led to the aforementioned success,” says CEO Neil Gopal.

Gopal points to three specific examples. The first is the creation of an “Illegal Use” category that allows penalty rates to be levied by the municipality.

“SAPOA believes this will go some way to discouraging illegal uses,” he says.
The second is a provision allowing vacant land forming part of the remainder of a township to be categorized as “residential property” – and rated at the residential property tariff.

“This is a positive step, as it significantly reduces the holding costs for developers,” explains Gopal.

“It’s in the interest of all owners that SAPOA should assist the municipality to identify these properties, and we are happy to do so.”

The third will see several categories of owners or properties receive rebates thanks to SAPOA’s intervention, including owners of high-value business or industrial properties, private townships and sectional title schemes.

“For example, a rebate of 40% will now be applicable to properties with a value of more than R500 million,” adds Gopal.

One provision that remains a concern for SAPOA however is the increased rate for vacant land, which is now 4.5, up from 2.0 in the previous fiscal year.

The City argues that a higher ratio will deter land grabs and illegal land uses, as well as encourage development. Not so, says Gopal, pointing out that high rates will not force the development of vacant land and might in fact prevent developers from undertaking further developments.

Nevertheless, Gopal points out the value of ongoing collaboration and discussion between SAPOA and municipalities on issues related to property.

“Rising municipal rates and taxes is a hot-button issue and we believe it to be in the interest of our members to partner with municipalities like the City of Polokwane to find effective solutions,” says CEO Neil Gopal.