People & News

Proposed levy

The Western Cape provincial government is to investigate the viability of imposing hospitality and commercial property development levies as a way of generating development funds for the province. A 10% levy on commercial property development would raise about R250m annually on this year's provincial development projects of about R2,5bn for social housing and property development in under-serviced areas, the premier Ebrahim Rasool said. Canada has a 20% development levy, and Ireland and Malaysia have similar taxes.

In Canada for instance, development fees are use in one of two ways to subsidise affordable housing:
* Developers of certain types of developments are required to pay a fee to support affordable housing as a condition of approval; or
* Development levies are reduced or adjusted in affordable housing developments.

The first instance is known as an "exaction" while the second is known as a "reverse exaction".

Full article on Business Day

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