Massive property rate hikes in South Africa – Cape Town vs Joburg vs Durban

 ·5 Jun 2024

Despite some municipal property rate increases beating inflation in recent years, many have stayed well below inflation over the past 10 years, but there’s a catch.

South Africa’s major municipalities have tabled their prospered tariff increases for the 2024/25 financial year, indicating the expected increase to be applied to their property rates.

The cent-in-rand rate is a statutory formula municipalities use to calculate property rates. The formula shows how much a person would pay in rates for every rand of their property value.

BusinessTech compared this rate to that in 2014, revealing the property rate increases over the past 10 years.

We compared the rates of the major metros across South Africa, including Buffalo City, the City of Joburg, eThekwini, and the City of Cape Town.

It must be noted that Nelson Mandela Bay’s formulas for 2024/25 were unavailable at the time of writing.

Of the metros compared, Buffalo City has increased its rate by a whopping 82%, beating out inflation over the same period—which stands at 63.5%.

The rate increases of other metros fell well below inflation, with Joburg recording a 48% increase and eThekwini increasing by 32.1%.

Surprisingly, Cape Town’s property rates increased by only 6% over the past 10 years. This is mainly due to a drop in rates in 2016, which decreased by 7%, before a massive cut in 2019— where the cent-in-rand rate was slashed by just over 22%.

MunicipalityResidential rates 2014/15Residential rates 2024/25% Change
Buffalo City0.0142690.01500082.3%
City of Joburg0.006161 0.00912648.1%
City of Cape Town0.0062540.0066316.02%

However, despite the below-inflation cent-in-rand rate increases, it doesn’t necessarily mean the rates you ultimately pay have stayed below inflation.

Municipal property rates are a cent amount in the rand rate levied on the market value of property.

Municipalities value your property through the General Valuation Roll (GVR), which is conducted every four years, with the latest conclusion in 2023.

However, there has been outrage over the outcomes of these valuations across the country.

According to Mark Govender from Swindon Property Valuers, while the increases vary per province, they have seen rates increase on average by ±20%.

Organisation Undoing Tax Abuse (Outa) noted in Joburg that the average property value in some areas increased by 44%.

When this increase in the value of your property is combined with the municipal rate, many homeowners could be paying rates well above inflation.

What’s worse, these massive property rate increases are on top of already exorbitant increases in other city tariffs, including electricity, water, sanitation, and refuse removal.

For the 2024/25 financial year, several municipal mayors have explained that above-inflation Eskom, water board, and salary increases have made these tariff hikes unavoidable.

Although electricity price hikes are mostly in line with Eskom’s 12.72% increase approved by Nersa, Nelson Mandela Bay and eThekwini drafted massive increases compared to other major metros – with the cities of Joburg and Cape Town managing to shield their residents slightly.

Additionally, the City of Cape Town has proposed a 5.7% increase in property rates, similar to their 10-year increase.

The city’s budget includes an increase that will support the continuation of rates-funded services, infrastructure investment, and the installation of generators to minimize the impact of power outages.

It will also cover the maintenance of informal settlements, provide rebates to vulnerable populations, enhance safety and security measures, and fund ongoing repairs and maintenance. This increase also aligns with the Integrated Development Plan (IDP) in relation to rates-funded services.

Read: The houses you can afford on the average salary in South Africa

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