By Fiona Wakelin

The Municipal Property Rates Act Is a national law which regulates the power of a municipality to value and rate immovable properties located within the boundaries of municipalities. Municipalities derive their power lo levy rates from section 229(1) of the Constitution.


Why do we need a Municipal Property Rates Act?

The Municipal Property Rates Act:


  1. Regulates the power of a municipality to impose rates on property (in accordance with section 229(2) of the Constitution).


  1. Provides a uniform framework for regulating the rating of property throughout the country.


  1. Excludes certain properties from rating in the national interest.


  1. Makes provision for municipalities to implement a transparent and fair system of exemptions, reductions and rebates through rating policies.


  1. Makes provision for fair and equitable valuation methods of properties.


  1. Makes provision for a fair objection and appeal process regarding valuation of property.



What must ratepayers do to effectively participate in the implementation of the Municipal Property Rate Act?


Chapter 4 of the Municipal Systems Act requires a culture of community participation in the affairs of the municipality.


Ratepayers have a responsibility to engage with their municipalities when municipalities invite public comments/submissions/inputs on their proposed rates, policies and budget. The rates policies deal with issues like relief measures to ratepayers such as rebates, and reductions in respect of owners of categories of properties which include the following:

o      indigent owners

o      Owners dependent on pensions or social grants

o      Owners temporarily without income

o      Owners of property situated within an area affected by a disaster



What is the municipal property rates revenue used for?


Municipalities need a reliable source of revenue to provide services and perform their functions. Property rates are the most important source of general revenue for municipalities, especially in developed areas and are used to fund services that benefit the community as a whole as opposed to individual households. These include:


o      Maintaining streets, roads, sidewalks. lighting, and storm drains

o      Building and operating clinics parks, recreational facilities and cemeteries


Property rates revenue is also used to fund municipal administration and governance.


Property rates are set by municipal councils, collected, and used locally. National and provincial governments do not have the power to levy rates nor do they share in the revenue collected. Revenue from property rates is spent within the municipality where the citizens and voters have a voice in decisions on how the revenue is spent as part of the Integrated Development Plans (IDPs) and budget processes.



The Local Government Municipal Property Rates Amendment Act 29 of 2014


The Local Government Municipal Property Rates Amendment Act 29 of 2014 aims to amend the Local Government: Municipal Property Rates Act, 2004, so as to provide for the amendment and insertion of certain definitions. These include:


  • That a rates policy must determine criteria for not only the increase but also for the decrease of rates
  • The exclusion from rates of certain categories of public service infrastructure
  • Infrastructure above the surface in respect of mining property is rateable and the rates are payable by the holder of the mining right or mining permit
  • The exclusion from rates in respect of land belonging to a land reform beneficiary is extended to the spouse and dependants
  • A municipality may levy different rates on vacant residential property
  • The period of validity of a valuation roll is four years in respect of a metropolitan municipality and five years in respect of local municipalities
  • A professional associated valuer may be appointed to the valuation appeal board if a professional valuer cannot be appointed;


 This Amendment was enacted from 1 July 2015.



Tariff hikes across the country


At the end of May this year, Cape Town, Johannesburg and eThekwini presented their 2021/2022 financial budgets – reflecting the price hikes that residents can expect to pay for electricity and other tariffs from July:


                                               Cape Town              Johannesburg                        eThekwinin

Electricity                      13.48%                           14.59%                                    14.59%

Water                               5.0%                               6.8%                                        8.5%

Refuse removal             3.5%                               4.3%                                        4.9%



For most households, the cost of both water and electricity is set to rise noticeably from July, which is when most local authorities implement their new annual tariff structures.


“Those who receive their electricity supply directly from Eskom will already be experiencing an increase of around 15%, and electricity costs in most municipalities are expected to rise by the same percentage from 1 July, thanks to the recent High Court order formalising an agreement between Eskom and the National Energy Regulator.


“Meanwhile municipal water costs are expected to increase by between 6% and 10% this year, having already risen by far more than the rate of inflation over the past few years, while refuse removal and sanitation cost increases are also expected to be higher than the rate of inflation in most cases.” – Gerhard Kotzé, managing director of RealNet.



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