How are municipal property rates determined?

Posted on Posted in MPRA

The financial liabilities for municipal property rates are calculated by multiplying the market value of immovable property (for example, land and buildings) by a Cent amount in the Rand that a municipal council has determined. For example:

  • If the market value of immovable property (land and buildings) is R 50 000, and o The Cent amount in the Rand is R0.015 (which is 1.5 Cent), then
  • Amount due for property rates = R50 000 x 0.015 = R750 for the whole year, which means that every month the property owner will pay R62.5 (this is calculated by dividing R750 by 12 as the year has 12 months) to the municipality.

If the immovable property in question is used as a residential property (home) or if it is used for multiple purposes, provided one or more of its components are used for residential purposes

  • The Cent amount in the Rand will be applied after deducting the first R15 000 of the market value of such residential property (this is a requirement of law through the Municipal Property Rates Act), which means that the R0.015 will be applied to R35 000 rather than R50 000 (that is, R50 000 less R15 000).
  •  The rates payable by the homeowner will then be = R35 000 x 0.015 = R525 for the whole year, which means that every month the property owner will pay R43.75 to the municipality.

The Cent amount in the Rand is decided by the municipal council taking into account public comments/submissions/inputs on the municipal council’s draft rates policy and budget that is subjected to the process of community participation in line with Chapter 4 of the Municipal Systems Act and the Municipal Finance Management Act.