Property Rates

All You Need To Know About Municipal Property Rates

Municipal Property Rates

COGTA defines property rates as the cent amount in the rand levied on the market value of the property (Land & Buildings). Property rates are calculated based on the value of land and improvements or buildings. This value is based on the market value of the property. That is the price that is realistically acquired for a property in the open market between a voluntary buyer and a voluntary seller.

The local government i.e municipality determines the property rates in their jurisdiction in consultation with residents and is governed by the Municipal Property Rates Act.


Who Pays Property Rates?

Residential and commercial property owners are liable for payment of rates due on their properties. PTO (Permission To Occupy) holders are also liable for rates on the land and buildings they occupy.


How Property Rates Are Determined?

Property rates are levied as a cent amount per rand or in the rand. Rates are charged differently depending on the category property falls under.


How To Calculate Your Rates

Step 1 (Property Valuation)

Get the municipal valuation of your property since rates are calculated based on that value.

Step 2 (Determine Property Category)

Determine the category your property falls into for example is it a residential, commercial or agriculture property. In Mbombela municipality, residential property rates cent amount is R0.007340 (Source )

Step 3 (Determine The Rateable Value)

Rateable Value is due to be charged property rates. To get your rateable value in Mbombela you deduct R100 000 from your property value since the first R100 000 (Source ) on your property is exempted from property rates. for example

a residential property in Mbombela worth R500 000 its rateable value is

R500 000 – R100 00 = R400 000

In Mbombela a property worth R500 000 the ratable value is Rateable Value = R400 000

Step 4 (Calculation)

Property Rates = Ratable Value * Rate Tariff (cent amount)

R400 000 * R0.007340 = R2 396 per annum

Monthly Property rates = R2 396 / 12

R244.67 / Month

Therefore a property worth R500 000 in Mbombela will be liable to pay R244.67 per month in rates.


How Does Municipal Property Rates affect Property Buyers’ Decision?

Property Rates BuyingMunicipalities charge different rates and exemptable value is different from one municipality to another for example Joburg municipality charges R0.006916 as property rates compared to Mbombela’s R0.007340. Joburg Municipality also exempt the first R350K while Mbombela exempt R100k (Source )


Thus a property worth R500 000 in Joburg the owner is liable to pay R86.45 per month while property of the same value in Mbombela is liable to R244,67 per month.

As a buyer who is looking for a town to buy a property, these are some of the factors to consider before you buy a property among many other factors.


Who is Exempted From Paying Rates?

Property Rates

  • Religious Organisations
  • Land reform beneficiaries (first 10 years i.e property does not change hands).


How New Valuation May Affect Property Owners?

 Municipal Property Rates Act (MPRA) regulates property rates tariffs when new property valuation is conducted to avoid major shocks to ratepayers due to the new property value (Source).


How is Property Rates Revenue Used?

Property Rates is one of municipalities’ bigger source of revenue in developed areas.

  • Lighting (Streets)
  • Municipal Clinics
  • Side Walks
  • Administration
  • Road
  • Storm Drainages.

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