Farmers in the Ndlambe region will soon join others from around the Eastern Cape in paying land tax to local municipalities as part of a three year phase-in plan.
Farmers in the Ndlambe region will soon join others from around the Eastern Cape in paying land tax to local municipalities as part of a three year phase-in plan.
Deputy director for Income Valuations at Ndlambe municipality Andre Buys says that land-owners will be taxed according to the market value of their property and that property valuations are already underway in the area. Finance director at Ndlambe municipality Howard Dredge said the tax is being phased in over three years and so allowing land-owners to get used to the idea. It will also give municipalities the time to implement the new tax correctly.
Land tax is different to property tax, in that a land tax taxes the value of the land only, whereas a property tax taxes the value of the land and the fixed improvements made on it (e.g. a house, a farm building, and irrigation canal).
Until 2006 the tax was controlled at a national level by the Algoa Regional Services Council (ARSC), with farmers paying taxes to the ARSC in the form of levies. However, the new land tax policy is managed at local government levels with municipalities handling the transactions and according to former minister of land affairs Derek Hanekom the taxes can help increase agricultural productivity and provide revenue for local government.
The process began more than two years ago when AVC Valuations started conducting agricultural valuations on local farms in the Port Alfred area. AVC then released the statistics in the General Valuation Roll, after which land-owners were given a fixed period to appeal to the municipality concerning any objections they had about the price of the farm. Buys says this phase is nearing completion despite numerous setbacks to the company. “AVC had a lot of complaints after it released the draft of the General Valuation Roll. They have now released the second roll and are busy clearing up the contestations,” he said. Buys says certain stipulations qualify farmers for rebates which will be deducted from the final amount, and he said these include providing staff housing and whether or not farmers have access to lights and water.
