Finance Minister Enoch Godongwana must clearly state in his Budget Speech that national economic recovery is impossible without disciplined local government. The persistent and excessive increases in property taxes add upward pressure on the inflation rate, resulting in adverse consequences for the broader property value chain. This leads to a reduced investment in theproperty sectorin the country, says Neil Gopal, CEO at the South African Property Owners’ Association (SAPOA).
He says these consequences filter through to the end consumer, raising inflation as a result. SAPOA,a member-driven, not-for-profit company operating in the commercial and industrial real estate sector, strongly urgesFinance Minister Enoch Godongwanato take action. SAPOA calls for the allocation of sufficient resources to local government to curb persistent, above-inflation property tax hikes.
Additionally, it insists that measures must be implemented to ensure that local government responsibly manages both the allocated funds and any other income it receives, preventing waste. “For many years, the National Treasury has published guidelines to municipalities regarding their annual budgets. It is a standard feature of these guidelines that municipalities are advised that increases in municipal tariffs and property taxes should not be more than the CPI inflation rate, and that any increases that are higher, should be properly motivated.
[paywall]
“In practice, however, no municipality, to SAPOA’S knowledge, adheres to these guidelines. SAPOA has seen evidence where these above-inflation increases are not questioned by National Treasury during its review of municipal budgets,” Gopal says. Godongwana will deliver the 2026 Budget on Wednesday, February 25. SAPOA, representingSouth Africa’s commercial property industryand some of the country’s largest ratepayers, urges Minister Godongwana to address specific issues in the National Budget.
[/paywall]
All Zim News – Bringing you the latest news and updates.
