Farmers fume as new rates loom

- Jackie Joubert


Mossel Bay Country Estate - giving Investors great returns - Photo courtesy Mossel Bay Country Estate

Farmers are alarmed at the new property rates legislation - due for promulgation this year - which will force them to pay municipal rates for the first time in South African agricultural history. They are demanding to know what the extra rates will be used for and that municipalities will not use the money to offset their budget deficits. Herold Farmers' Association chairman Tees van Rooyen, says: “We want to know what we are paying for. This is an expense that has no bearing on agriculture and that will have a huge negative impact on farming. As it stands at present there is absolutely no benefit to the farmer. We do not enjoy any of the services of urban dwellers. Each farmer has to create his own infrastructure at great capital outlay from developing water resources to laying on electricity. We're responsible for sewage and waste disposal as well as housing for our labourers.” Johan Keller, chairman of Agri-Klein Karoo, which covers the area from Ladismith to the Upper Langkloof, feels that farmers will do all they can to prevent a Zimbabwe-type situation in South Africa, but asks for fair play. “We are not against paying our dues. Farmers are, for instance, paying levies to the Regional District Boards, which go towards maintaining roads, running clinics and which also include water levies for farms falling under irrigation schemes such as Stompdrift outside De Rust and the Kamanassie Dam. “What is disconcerting is that each municipality can set its own rates. In Oudtshoorn we have been given an unconfirmed figure that the municipality is looking for an additional income of around R800.000 a year from farmers in the district, which roughly translates to rateable liability of R4.500 for a farm valued at R1.million.” Some agricultural unions have gone so far as to suggest that the country's food supply may be threatened. The Coalition of Traditional Leaders of SA has objected to the levying of rates in their areas and some commentators fear that it will exacerbate poverty in rural and underprivileged areas. According to the Property Rates Bill currently under review, two major categories of property agricultural land and sectional title units - will become rateable properties. Rates will be phased in over three years, from 25% for the first year, 50% for the second and 75% for the third year. Properties under R150 000 in value will not be subject to rates. Says Knysna property lawyer, Sue Mosdell: “Only time will tell whether the new law is equitable or not. It will depend on how it is implemented.” The upshot, however, was that it would bring into the rating net a large number of properties, such as farms, which until now had not been rateable, and, with sectional title units, which proportionately had only small amounts levied on them. By valuating sectional title units individually, as opposed to a building as a whole, vast additional sums would be collected. This, she felt, could mean that rates overall could be lowered in the long run. (Further information can be obtained from Sue Mosdell of Mosdell, Pama & Cox at 044.382.5333). The government has been at pains to allay the fears of the critics. Yunus Carrim, chairman of the parliamentary committee which deals with the matter, has pointed out that there would be thorough guidelines, checks and balances contained in the Bill. He believes that analysts who have predicted substantial hardship to the poor or that the property market will be dramatically affected, are being unduly alarmist. The Langebaan Country Estate, as was the case with the Mossel Bay development, will offer investors a 'villages' concept, with a choice from lock-up-and-go apartments from R345 000, to single and double storey town homes, up to luxury residences in excess of R2 million. Buyers of freehold stands can choose their homes from numerous architect-designed options. Langebaan will also offer a seniors' Lifestyle Village, complete with a private healthcare centre, and doctors' rooms with a full time matron. As of July 1st, 2003, prices range from R225 000 for a 1 bedroom studio, up to R525 000 for a 130m2 house with 2 bedrooms,2 bathrooms and a garage. As with Mossel Bay, the housing footprint in Langebaan will represent less than 8% of the total area (450 hectares), with plans for a shopping centre, restaurants, a petrol station as well as a Private High School, bowling greens, tennis courts, swimming pools, plus an equestrian centre, a hotel and a conference centre.