The National Treasury of South Africa has released a new draft law that will rationalize the fees municipalities levy for new property developments. The draft bill titled as the Municipal Fiscal Powers and Functions Amendment Bill is now in the public domain and will give clear three months to the public to air their opinions and suggestions.
The bill, among other things, enables local governments a fixed structure to collect revenue from property developers for the costs incurred by the municipality for the new infrastructure or upgrading existing infrastructure. Revenue collection has been a major hurdle for the municipalities. Also, the fee structure is not uniform, which creates often confusion and hardships among realtors. That has led to many defaulting on municipal fees so much so that municipalities across the country have arrears of R 130 billion to be collected as water and electricity bills from consumers.
The 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 through the municipal land use planning system. The bill sought to increase the amount and predictability of development charge revenue.
