Local authorities will base their rates calculations on the combined market value of the site and its "improvements" - or what is built on the site. However, the cents in the rand they charge property owners and what rebates they apply to different types of property and categories of owner allows for considerable variation.
Estate agents and conveyancers should therefore understand how the system works by asking a number of questions, such as:
- What is the current "market value" being used by the local authority to calculate rates? Is it the last sale price recorded in the Deeds Office? Or are prices adjusted automatically every few years?
- What is the current "randage" - or number of cents in the rand being charged as property tax?
- What are the current owners paying compared to similar neighbouring homes?
- Are the rates payments up to date? No clearance certificate could delay the property's transfer.
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