Rates, taxes and levies are monthly costs that the Body Corporate and local Municipality charge in order to fund the services they provide.
Rates, taxes and levies are dependent on your property type and are paid to the authority which services your property such as a body corporate or municipality. The Body Corporate levies usually cover the costs associated with running the estate and include such items as management, security, repairs, garden, pool and common property maintenance, and common property electricity. The Body Corporate and Trustees present a budget for the year at the AGM and once approved, is calculated and apportioned according to a participation quota and divided amongst unit owners into a monthly levy amount. Unit owners are fully within their rights to request and inspect the financial statements and management accounts of the Body Corporate, and should attend meetings such as AGM’s and other Special General Meetings to be kept up-to-date and fully informed with scheme proceedings.
If you are buying a freestanding property you will be charged monthly for municipal rates and taxes.
This charge covers the services provided by your local municipality such as sewerage facilities, roads maintenance, street light maintenance and refuse collection.
If you are buying a sectional title property such as a property in a complex or a flat, you will be charged levies. These are the costs involved in running the complex, and include municipal rates and taxes, limited building insurance coverage, repairs and maintenance.
Does the Levy amount charged by the Body Corporate include Municipal Rates?
The Sectional Titles Act outlines the fair and equal distribution of shared costs for an effectively run scheme. Etchells & Young would strongly advise that owners of sectional title units familiarise themselves with the Act and the relevant section on levies. Click to view the full Sectional Title Act. Please be aware certain amendments and changes have very recently been made to this Act. * With a rental property, the Levies are usually still paid for by and are the responsibility of the Landlord without reference to the Tenant, unless stated otherwise in the lease. .
The Municipal rates and taxes, on the other hand, cover all services provided by the local municipality and includes sewerage, refuse collection, road maintenance and street light maintenance. The amount levied is calculated according to the land value and any improvements/buildings added to it, based on the property’s market value. * With a rental property, the Municipal rates & taxes are also usually paid for by and are the responsibility of the Landlord without reference to the Tenant..
The rates and taxes charged by City of Jo’burg (CoJ here after) is now separate from the levies amount that the Body Corporate of a Sectional Title scheme bills to the owner. Payment of rates and taxes is the responsibility of the owner and does not fall to the Body Corporate. (Before 2007, many Body Corporate’s did collect the rates and taxes together with levies and paid these over to CoJ on behalf of the owners. This law has since changed and it is now each individual owner’s responsibility to ensure an account is opened and paid).
On transfer, CoJ automatically open an account in the new property owner’s name based on the Deeds Office information they obtain. The Attorney attending to the transfer and/or the Estate Agent who handled the sale, should inform the new home owner of this and advise on the process. Visit The City of Joburg for more information on opening an account.
The City of Joburg are generally very accommodating and approachable in assisting with account payments and entering into a payment arrangement to pay off larger debts; however, the owner would need to speak to CoJ directly. Home owners may request that a monthly rates and taxes statement be sent via email. Visit The City of Joburg for more information on monthly statements.
Sources – https://www.property24.com/property101/buyers-guide/rates-taxes-and-levies/15288