Real Estate Investor Magazine South Africa March/April 2020 | Page 38
LEGAL
Development
charges & levies
Everything you need to know about the
Amendment Bill
SIDIMA MFEKU
The Municipal Fiscal Powers and Functions Amendment Bill
ensures that the cost of the municipal infrastructure required
to service a new land development is primarily borne by its
direct beneficiaries. It advocates for the support of economic
development by local developers in different municipalities
around the country.
I
n countries like South Africa, the sanctions we pay are
often used to finance various governmental development
services like roads, schools, hospitals and other
infrastructural developments of the country. Sometimes
even used to rescue some of government’s divisions out
of economic scares. The taxing of the various business
divisions in the country is to make certain that all sectors
fairly contribute towards the innovation of South Africa as a
nation. This is widely known to be carried out by the South
African Revenue Services, SARS. With the new Municipal
Fiscal Powers and Functions Amendment Bill one wouldn’t
know what the difference is between taxes paid to SARS and
the charges that the bill enables Municipalities to levy on
property developers.
What is the Amendment Bill?
The Municipal Fiscal Powers and Functions Amendment bill
establishes an unambiguous, fair and consistent basis for
municipalities to recover development charges for all new
land development projects that require statutory approvals
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MARCH/APRIL 2020 SA Real Estate Investor Magazine
through the municipal land use planning system.
According to the National Treasury “the purpose of
the bill is to increase the amount and the predictability of
development charge revenue to provide both municipalities
and developers with more certainty and assurance that the
costs of infrastructure are covered by its users. The incidence
of the payment is also immediately apparent as the land owner
pays and, to the extent that the market permits, the land owner
will pass on these costs to the purchaser of the property that
is sold.”
The Amendment Bill provides for a uniform regulation
of development charges. Development charges are a once-
off charge levied by a municipality on the land owner as a
condition for approving land development application. They
are imposed to cover the costs incurred by the municipality
when installing new infrastructure or upgrading an existing
infrastructure that is required to service the proposed
development.