Mailbox: In response to Andrew Kenny – A taxpayer’s perspective on the Joburg property crisis

In response to Andrew Kenny’s article on the two-sided property crisis in Johannesburg, Codesa’s Adv Hein van der Walt addresses the challenges faced by property owners in the city and highlights the burden of property taxes, the need for metro sensitivity, and the value of vacant stands in shaping the city’s future.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Johannesburg two sided property crisis

By Adv Hein van der Walt

Dear Andrew, Cc Alec,

Thank you for your article and case study of the predicament; selling a house out of a deceased estate.

Herewith my perspective as a taxpayer –

Holding costs

Property taxes can make the holding cost of properties unsustainable, forcing some owners to abandon properties when it becomes uneconomical.

Buildings

Metros must keep pace with the ‘life’ cycles of buildings: from year one to year 30 buildings go through phases, from beneficial for the community, for business, generate taxes, generate income for the owners, bankers etc.

Then decline sets in and maintenance and security costs escalate, the value of the buildings declines (does tax ever decline? never). Eventually escalating property tax makes it uneconomical and force owners to abandon their buildings and stands.

Plea- regard property owners are valuable ‘partners’ in the economy of metros.

Metros should be sensitive and adjust and relax property taxes especially during the later cycles of the aging properties, grant owners tax holidays to alleviate the cost of security services and incentives to refurbish and rezone buildings- (Old, well-kept buildings in some rural towns are evident of councillors that understand this balance).

Team-up with owners for urban renewal.
Offer them options to rezone their properties.
Offer special assistance to fast track rezoning.
Dedicate a team of specialists to facilitate the rezoning process .
Reduce the costs for rezoning and relax environmental impact reports on existing structures.
Simplify and enhance E-filing transfer of titles (E-filing helps a great deal).

Joburg Property

Modernise and alleviate the workload of Joburg Property to improve their capacity to proactively manage the health of our buildings, our city.

Vacant stands

Metros should value private owners of vacant stands. They are the future of the metros. Encourage owners with reasonable tax rates. Irassional property taxes drive them away.

Case study

This year the tax on the business4 stand in the photo below has increased with R7 000 to R26 880.00 per month. It is a rocky stand and is about 12 meter lower than street level. After the stand’s street access was closed, the stand has no alternative access to a street, and no water and electricity service.