- This topic is empty.
Viewing 1 post (of 1 total)
-
Posts
-
R65 million down the drain
Public Works Minister Dean Macpherson revealed the government spent R65 million on rates and taxes on 1,259 vacant land parcels, 207 unoccupied houses, and 830 abandoned farms.
Macpherson revealed that the South African government has a portfolio of properties worth R150 billion to R200 billion. It includes houses, buildings, vacant land, and farms.
He said spending R65 million on rates and taxes on vacant lands and buildings makes no sense, as these assets could benefit the public and the state.
“Based on the Property Management Information System (PMIS) calculations of holding costs, the estimated potential revenue lost in the 2025 financial year is R83 million,” he said.
He explained that the state owns these properties on behalf of the public, and as such, the public should benefit from these properties.
The Department of Public Works is now starting to explore how it can collaborate with developers to develop these properties and earn money from them.
The Department has placed 31 properties on the open market and invited interested investors to submit proposals on optimal utilisation and revenue generation.
“We want to run the properties as a property portfolio to generate annuity income for the state and create jobs,” he said.
He said they expect to attract R10 billion in private sector investment through just ten of these properties, create 165,000 jobs, and generate R200 million annually for the state.
“If you extrapolate this model across more properties, it could be very beneficial to the state and the country as a whole,” he said.
Macpherson explained that the government launches a request for proposals for available properties and then assesses the best case from the proposals it receives.
The government issues leases based on the property’s use, with lease periods varying according to that use. Lease periods typically range between 20 and 99 years.
Apart from partnering with the private sector to develop these properties, the Public Works department is also looking to offload them to municipalities.
Transferring these properties to municipalities means the state will not have to pay millions in rates and taxes each year.
The minister added that they would release another 30 properties for long-term leasing and invited interested investors to submit proposals.
“The department will also re-advertise 600 state-owned properties for general letting out,” Macpherson told parliament.
They will also release agricultural farms that are not earmarked for the Department of Agriculture, Rural Development and Land Reform for long-term leasing.
As a last step to optimise the state’s property portfolio, it will dispose of non-core residential properties.
Viewing 1 post (of 1 total)
- You must be logged in to reply to this topic.