oa Journal of Economic and Financial Sciences - Die toepaslikheid van deeltitelheffings in Suid-Afrika
|Article Title||Die toepaslikheid van deeltitelheffings in Suid-Afrika|
|© Publisher:||University of Johannesburg|
|Journal||Journal of Economic and Financial Sciences|
|Affiliations||1 North-West University, 2 North-West University and 3 North-West University|
|Publication Date||Apr 2012|
|Pages||103 - 118|
|Keyword(s)||Cost allocation, Levies, Operating costs, Participation quota and Sectional Title Act|
This study challenges the fairness of sectional title schemes' levies that are ordered by the Sectional Title Act (95 of 1986) to be allocated according to the participation quota (floor area) of units. Studies have shown that larger units in a sectional title scheme tend to subsidise the levies of smaller units. A log-transformed linear regression analysis was performed to investigate the cost behaviour of 113 sectional title schemes. The results revealed that 86% of the variation in the operating costs of a scheme is attributable to the variation in the area of a scheme, while 87% of the variation in operating costs is attributable to a variation in the number of units in a scheme. The conclusion is that the area and the number of units in a scheme are equally significant drivers of operating costs. Therefore, the study recommended that the levies should be allocated on a 50/50 basis with regard to area and number of units.
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