The new taxation rates on property have been determined and were accepted by the Makhado municipal council at their meeting on March 31. Taxpayers will now be able to do their own calculations in this regard to make sure they are not being overtaxed.

For residential properties, the rate is to be 0.5 cent (½ cent) in the rand. This means that the calculation for determining how much a person will pay is done as follows:

If your property is valued at R500 000, you will receive a rebate of R20 000 (since no property worth less than R20 000 is taxed). This means your property is taxed on R480 000.

Multiply 480 000 by 0.005 = R2 400 per year, divide by 12 months = 200 per month.

For businesses, the rate is 0.75 cents (¾ cent) per rand. A business owner whose building is worth R3 000 000 receives the same rebate of R20 000 and is taxed on R2 980 000. The tax is therefore R2 980 000 x 0.0075 = R 22 350, divided by 12 months = R1 863 per month.

The big question on everybody’s lips is whether or not home owners, many of whom earn a salary, will be able to afford this increase. Businesses will obviously be hit harder and the reality is that the increase will be passed on to customers. With the increase in the fuel price, on top of the high interest rate and Eskom’s proposed new tariffs, the man in the street has less and less money in his pocket to pay for groceries, school fees, living expenses and everything else that requires money.

People who rent property will also feel the effect of the rate increase, as no property owner will be prepared to absorb the additional cost at his/her own expense. It will be incorporated into the monthly rent to make the transaction viable for the owner.