Rate hikes hitting major cities in South Africa – how much more you’ll pay in Joburg, Cape Town and Durban

Property rates have increased across South Africa, with the exception of Cape Town, which reduced its rates by 1.1% – and with the completion of the general valuation roll in 2023, these rates could put South Africans under more financial pressure.

The general valuation roll (GVR) is conducted every four years to update property values which are then used to adjust the rates residents pay for their homes.

Municipal property rates are calculated by multiplying the market value of the property – as reflected in the valuation roll – by a cent amount in the rand rate that a municipal council has determined.

These new rates will come into effect from 1 July 2023. 

However, irrespective of the outcome of the GVR, all qualifying properties, at minimum, will pay the property rate as determined by the cent amount in the rand rate.

This means that if your property’s value remained unchanged after the GVR, you still have to pay the determined annual increase of the municipal rates.

For example, if your property’s value remained unchanged, Joburg homeowners would still have to pay a 5.3% increase, Tshwane (5%), and eThekini a considerable 8.9%.

Notably, Cape Town homeowners will be the only South Africans to see a drop in property rates – a decrease of 1.1% from 1 July 2023.

The increases in municipal property rates for several prominent municipalities in South Africa for the 2023/24 financial year are given in the table below.

Other factors affecting the amount of tax you pay are the statutory R15,000 exemption for all properties (according to the Municipal Property Rates Act) and any rebate determined by the respective municipality’s property rates policy.

For example, Joburg homeowners will not pay tax on the first R300,000 of the market value of a property, while Durban residents are only afforded R120,000 of the market value not taxed.

The City of Johannesburg has reduced its rebate by R50,000 from R335,000 to R285,000 for the 2023/24 financial year. In 2022/23, homeowners currently do not pay tax on the first R350,000 (including the statutory R15,000 exemption).

Again, Cape Town homeowners will be the only South Africans to see an increase in these exceptions and rebates. From 1 July, the rebate for all properties valued under R5 million will increase from R285,000 to R435,000 – an increase of 52%.

This is in addition to the statutory R15,000 exemption for all properties, which means the first R450,000 of those residential properties’ values will be exempt from tax.

Considering this, and depending on the outcome of the GVR, the municipal rate changes that homeowners in Joburg, Durban, and Cape Town can expect to pay per month based on their property value from 1 July 2023 are given in the tables below.

City of Johannesburg

Durban – eThekwini 

City of Cape Town 

Additional rate hikes coming for South Africans 

While these increases seem manageable, including the welcome relief for Capetonians, there is no doubt that 2023 will bring further financial pressures for South Africans when you consider the additional rate hikes homeowners will be dealt with.

Several major metros in South Africa have tabled their draft budget proposals for the 2023/24 financial year, revealing hefty tariff increases for residents alongside the abovementioned property rates – including electricity, water, sanitation, and refuse removal.

Addressing the reasons for the proposed tariffs, many of the municipal mayors said that above-inflation Eskom, water board, and salary increases have made tariff increases inevitable.

However, some residents in South Africa are posed to step into deeper waters than others, with eThekwini Metropolitan Municipality drafting the steepest increases.

Although electricity price hikes are mostly in line with Eskom’s 18.49% increase approved by Nersa, eThekwini drafted a massive increase compared to other major metros. At the same time, the City of Cape Town has managed to shield its residents slightly.

eThekwini tabled a whopping 21.91% electricity tariff increase – 3.32% higher than Eskom’s 18.49% municipal hike – while its water tariff is set to increase by a notable 14.9%.

eThekwini Mayor Mxolisi Kaunda said this is a result of Umgeni Water’s approved tariff increase for bulk water is around 13%, although no explanation was given for the massive electricity increase.

On the other hand, the City of Cape Town has reduced Eskom’s 18.49% municipal rate increase to 17.6% by absorbing about R15 million a month.

According to Cape Town’s mayoral committee member for finance, Siseko Mbandezi, about 70% of Cape Town’s tariff income will go towards buying bulk electricity from Eskom, with the remaining 30% invested in service delivery and ending load shedding.

These additional rate hikes are tabled below. It must be noted that the City of Ekurhuleni’s planned increase in residential electricity tariffs by 15% was tabled before Nersa pronounced Eskom’s municipal tariffs, which leaves room for adjustments.

Read: What a R2 million home looks like in Joburg vs Cape Town vs Durban and more