The announcement by Government that homeowners were going to have to reach further into their already empty wallets and pay higher rates on second properties came as a major shock and unleashed a virtual riot among those who have had enough. Not regarded as a nation of complainers, it has become evident that South African homeowners are not willing to sit back and allow their local municipalities to penalise them simply because they own more than one home.
Regarded by many as a means of support, the news has literally blown up in government’s face, forcing the Deputy Minister of The Department of Cooperative Government and Traditional Affairs, Yunus Carrim to state that the wording of the bill may have been misrepresented. According to the minister, the amendments were aimed at those who owned second and third properties that are utilised as guest houses, bed and breakfast establishments or small hotels and would not affect those who rented out second homes. But that is not what the amendments say and regardless of the reassurances it has become evident that the general public is not willing to take Governments word for it and the backlash by angry homeowners has been growing in intensity.
Adrian Walden, co-founder and senior director of Morris Fuller Walden Williams Attorneys Inc., a Durban based law firm, says that his office alone received almost 2000 emails from people who were objecting to the proposed amendments. What appears to have annoyed people the most is the way that Government tried to push the Bill through.
“Despite the fact that I am a Conveyancer specialising in property law, I was totally unaware of the proposed Bill until I saw a reference to it in an article in a local community newspaper on Wednesday 13 July.”
Most people only became aware of the amendments after this date and only had until 22 July to submit their objections.“I felt it was imperative to notify as many people as possible as to the effects the proposed Bill would have on second properties if the Bill was passed into law. I send out numerous emails, and, as I felt very strongly about the matter, I offered to submit objections on behalf of property owners, whether they owned a second property or not. From the responses received, it was clear that my emails had been forwarded all over the country and in some cases even to people overseas who owned property in South Africa.”
The real estate industry has also come out with all guns blazing, in some quarters accusing government of hijacking an already sensitive market. Barry Davies, the Franchising Director of the Chas Everitt International Property Group, says that the housing market is incredibly sensitive to any negative news, particularly in coastal areas that have been harder hit by the property downturn. “We have already had calls from principals in our network who advise that purchasers with pending offers were now considering withdrawing them because of the proposed amendments.
“If the legislator’s intention was that the amendments should only apply to properties used for commercial purposes, why draft and propose amendments with, never mind loopholes, but sinkholes which you could fly a jumbo through. If this is the case, the Bill is inaccurately and thoughtlessly worded in the current economic environment.”
In a nutshell, it is precisely this point that has invoked the wrath of the South African public. Why write something and try to implement it without checking that the wording is correct and will not affect innocent parties. While government’s intent may not have been to burden already overburdened homeowners with higher rates bills, had these amendments gone through unchallenged this is exactly what would have happened.
There are undoubtedly some municipalities that would have taken full advantage of the situation and charged commercial rates on second homes, simply because an amendment had been passed with little or no objection. The bad news for government is that the tax-paying public have become far more aware of just how important their voices actually are and at this stage are shouting their objections from the rooftops.
The ball is now in the government’s court. Property owners and other industry players are waiting for a response.