City ramps up efforts to assist businesses
20 April 2020
Update by James Vos, Mayoral Committee Member for Economic Opportunities and Asset Management.
There is no denying the devastating impact of the global Covid-19 pandemic on our national and local economy. As we adjust to this new normal and the extension of the lockdown to contain the spread of the virus, the City of Cape Town is working around the clock to support businesses. We do this because we are all in this together and so that we are ready to reignite the economy once we emerge from this crisis.
I am happy to confirm that the City has now extended our relief measures to the accommodation sector.
This weekend, the City’s Finance Directorate confirmed the availability of the relief measures available to this sector and which I have summarised below.
Guest houses and certain B&Bs now have the option of applying to change their property classification, due to the impact of COVID-19, which could cut rates bills in half in some cases.
According to the City’s Rates Policy, guesthouses and certain B&Bs are classified as business properties for rates purposes where more than 40% of the bedrooms are used or available to provide temporary accommodation for paying visitors.
The municiple rates on these properties are higher than ordinary residential properties. Due to COVID-19 many guesthouses and B&Bs do not currently use 40% of their rooms. It must be noted however that if more than 40% of the rooms are used, the property rating category used for business purposes will apply
Guesthouses and B&Bs that want to keep operating can offer accommodation as an essential service for front-line health care workers or people who need to be isolated.
There are three options available in terms of the Rates Policy:
- Continue to operate without change and be classified as a business property. If the account falls into arrears, the account holder may apply for payment arrangements.
- Close the operation and apply for the reclassification of the property as a residential property. The account holder will not be able to operate as a guesthouse or bed and breakfast but the rates will be reduced because of the reclassification and all service related tariffs and charges will be amended accordingly.
- Reduce the footprint of the business operations, so that the property is used mostly for residential purposes, and apply for reclassification of the property so that rates can be reduced.
To apply to reclassify a property category please email Valuations.RCC@capetown.gov.za
Earlier this month, the City’s Finance Directorate announced relief measures for commercial property owners (and ordinary residential property owners). These measures allow for payment options to assist property owners to pay off rates over an agreed number of months, with no interest charged, or debt management actions taken on the condition that the arrangement is honoured. To apply for this relief measure, email (during lockdown) COVID19.Relief@capetown.gov.za or SMS to 48043. Each application will be assessed on its own merits and please submit proof via email.
In addition to these relief measures, we have put together a number of platforms to help businesses and individuals understand the support they can access from government and other institutions.
Together with our partners in the Province, Wesgro and GreenCape, we established a tool called the COVID-19 Support Finder. This tool and thewww.supportbusiness.co.za website provides an overview of a large number of available funding and relief measures.
We have also set up a very useful information portal linked with the City’s Department of Enterprise and Investment at www.investcapetown.com to assist business and industry with all the latest news and links to sites. All the information on this site is aimed at providing business with clarity and information on sector support initiatives, including information on the investment incentives and facilitation services offered by the City of Cape Town.
The team at The Business Hub, the City’s initiative set up to support SMMEs and entrepreneurs, can also provide assistance and information. Additionally, The Business Hub has also increased its ability to respond to business rescue by partnering with Productivity SA that can undertake rapid diagnostics of companies in distress and where possible propose immediate measures that can restore the financial health of the company. Please contact the Business Hub by sending queries via email to firstname.lastname@example.org
These are very difficult times and we are all in this together. My team and I will continue to engage with the various business sectors to understand their challenges so that we can continue to provide the most effective help now and post-Covid-19.