If you’re a first-time homeowner, you may find your municipal account more than a little confusing.
Cosmopolitan Projects – a real estate developer – has put together a basic guide to help you … (Please note that this article is intended as an advisory guide only and does not replace the guidance provided by your local council. Each council uses its own terminology and this can change without notice.)
• Let’s start with why you receive a municipal account …
If you own a house or property and have access to electricity, water and waste removal services, you should receive a monthly bill from your local municipality for these various services, as well as the taxes you pay on your property.
While no two municipalities issue identical bills or always use the same terminology, the basic information remains the same. Always check your account and ensure that the details are correct.
There are five main charges on your bill namely:
• Water – a tariff per kl is charged by the council based on your metered water consumption. If you are on pre-paid water, there will be no water usage charge on your municipal account.
• Sewerage or waste water.
• Electricity – if you are on a metered account, you will receive a charge for this based on how much electricity you used. If however, like most new households, you are on pre-paid electricity, there will be no electricity usage charge on your municipal account.
• Refuse removal of solid waste.
• Rates and Taxes, also called assessment rates.
The account will give you a detailed breakdown of the total amounts payable including:
• Basic services, also called availability charges – Availability charges are a fixed amount charged to recoup the capital costs of delivering water, electricity and sewer connections to your property.
• Itemised consumption and adjustments for water and sanitation and refuse collection – Water is charged based on how much you use each month. If you are on prepaid electricity there will be no electricity charge on your account.
• Assessment rates also known as rates and taxes – The income generated by the levying of assessment rates is used by your municipality to provide services to the region such as libraries, parks, sports fields, roads, infrastructure and so on.
All property owners must pay rates and taxes from the day they become the registered owner, regardless of whether you live in the property or not.
It is your responsibility to open an account at council in your name and pay a consumer deposit. Make sure that you provide the correct billing address, and if you do not receive the statement every month, you need to enquire at council to rectify this. Remember to pay an amount every month even if you have not received your account to ensure that you don’t end up with a huge bill to settle once your account is finally sorted out.
What happens on a property bought off plan at registration?
• Rates and taxes – In terms of rates and taxes on a new property that is built off plan, there are two ways that council will levy rates and taxes. If at the time of registration of the property in your name, the council has not yet completed the property evaluations, you will be charged a ‘vacant land tariff’ which is slightly higher than the residential tariff.
Once the council completes the valuations, you will be switched to the residential tariff. At this point the council will do a ‘rates adjustment’ which means they work out the difference between what you paid under the vacant land tariff versus what you should have paid under the residential rate, which is usually slightly lower.
Typically, if you were paying the higher vacant land tariff you will receive a refund or credit on your account. You will also receive a small assessment rebate which all property owners receive – the exact amount varies between different councils.
• Availability charges for water, electricity and sewerage connections – You will be charged for services that have been ‘connected’ to your property – such as water, electricity and sewerage connections.
These are known as basic service or availability charges and they are a fixed rate each month. Once your water meters are installed these charges will switch to a metered consumption and you will no longer be charged a basic fee, but charged for your actual usage based on the meter readings.
If for whatever reason the council continued to charge you for the basic charges after your water meter was installed, they will revert back to the installation date of your meter, reverse the basic charges and then charge you for your actual consumption.
It can be really confusing when you look at all the charges and terminology on your municipal bill, especially if you’re new to home ownership. Take the time to study your account and make use of your local council’s support line or website for assistance on any queries.
Do you perhaps have more information pertaining to this story? Email us at randfonteinherald@caxton.co.za (please remember to include your contact details in the email) or phone us on 011 693 3671.
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