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Development Charges

Development Charges. June 2011. BACKGROUND. Presently new external infrastructure costs for new and upgraded capacity for developments are in the main subsidised by all ratepayers and not on a user pays principle.

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Development Charges

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  1. Development Charges June 2011

  2. BACKGROUND • Presently new external infrastructure costs for new and upgraded capacity for developments are in the main subsidised by all ratepayers and not on a user pays principle. • Durban has applied a simplistic “Development Charge” across the Metro from 1 July 2010 (applied in the Outer West from 2003). • The other Metro Municipalities in the country, i.e. Joburg, Ekurhuleni, Tshwane and Cape Town, are currently levying development charges of one form or another, hence some recovery of costs. • National Treasury Policy is to introduce Development Charges on a rational basis, across the entire country. • The Municipal Fiscal Powers and Functions Act of 2007 is to be amended to better provide for a Development Charge. • Spatial Planning and Land-use Management Bill, 2011 (SPLUMB) makes specific provision for a Development Charge. This is set to be enacted in 2012.

  3. KEY POLICY OBJECTIVES • Equity and Fairness - DC must be reasonable, balanced & practical so as to be equitable to all stakeholders. • Predictability – DC must be predictable, legally certain & reliable. • Spatial & Economic Neutrality – DC primary role is to ensure timely, sustainable financing of required urban infrastructure. • Administrative Ease & Uniformity – The determination, calculation and operation of the DC should be administratively simple and transparent. • Specific Use of Development Charge – Can only be used for effecting changes to infrastructure and for no other purpose.

  4. WHAT ARE DEVELOPMENT CHARGES?

  5. THE NEED FOR DC POLICY – NATIONAL CONTEXT

  6. PRIMARY ROLE Is to apportion the installation costs of infrastructure

  7. Structure of the Development Charge Fee is levied for provision of Municipal infrastructure required for essential services to a development CALCULATION OF DC STRUCTURE & CALCULATION OF DC

  8. STRUCTURE & CALCULATION OF DC

  9. DEVELOPMENT CHARGES The landowner is responsible for payment of the development charge, although in most cases the developer (who may also be landowner) will attend to payment thereof Development Charges will be applicable to all developments for which the approval of the Municipality is required in terms of any law, by-law or scheme These relate to land use applications for township development, subdivision applications, change in zoning, change of use of an existing building Who is liable for the Charge? Which developments are affected?

  10. WHEN IS DC EFFECTIVE? • Development Charge will become effective from 1st July 2012 • It will be implemented on a phased basis over a number of years to lessen impact of new cost to developers • Policy & By Law will be subject to National Treasury directive / National Legislation when promulgated.

  11. WHEN IS DC ASSESSED & PAYABLE? • The Development Charge is to be assessed upfront during the planning application approval stage. • The Development Charge is payable on approval of the development (and only after all appeal processes , if applicable, are exhausted).

  12. Thank You Questions ??

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