On the road to property ownership: municipal rates, estate levies and Homeowner Association fees
Category Advice
Depending on the ownership scheme which your property is held under, there will be fees to be paid. These fees can either be levies or municipal rates and taxes. Before you make the leap into property ownership, it is important that you know the different types of monthly costs that come with it.
Municipal rates
Your municipal rates cover all services taken care of by your local Municipality. These services include things like refuse removal and garbage collection, infrastructure maintenance on streetlights and roads and other essential services like sewage, water, and electricity. The rates you pay are calculated on the value of your home, which is calculated based on the area you live in and size of your dwelling. If you own a home, this is a fixed cost that is non-negotiable.
Estate levies
Anyone and everyone who lives in an estate will pay estate levies. This is a monthly cost, paid by the property owner, for the general upkeep of the estate. Pam Naidu, Head of Sales and Marketing for Devmco Realty, explains in more detail,
"Estate levies are used to cover costs for the general maintenance, estate security, and upkeep of the communal areas and facilities within the boundaries of the complex or estate. These areas and facilities include public pools, gardens, public infrastructure, cleaning and so forth."
One thing to keep in mind, is that you will have to pay monthly levies irrelevant of whether you live in the property or not. Levies are fixed costs which are the responsibility of the property owner.
Homeowner's Association fees
A Homeowner's Association or HOA is primarily established for the good of property owners. A HOA is normally formed in the case where a Body Corporate is not suitable due to the ownership scheme under which the properties fall. HOA's are established in estates or clusters of properties where owners have full rights of their section (unlike a sectional title scheme where owners purchase a section of a building) or own freehold property. Similarly, to a Body Corporate, a HOA, is in part, responsible for the establishment of certain rules like policies regarding pets and whether an estate will allow holiday letting or not. An HOA can charge a fee, or levy however, the amount is based on several factors specific to the HOA. The regulations of a HOA can be limiting for some, so it pays to do your homework beforehand to ensure these limitations do not infringe on your lifestyle.
Property ownership comes with costs, many of which are non-negotiable. It is wise to factor these numbers in when doing a suitability assessment, because, you as the property owner, are liable for these costs whatever the case may be.
Author: Devmco Realty
