{"id":484107,"date":"2021-04-19T12:44:11","date_gmt":"2021-04-19T10:44:11","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=484107"},"modified":"2021-04-19T12:44:11","modified_gmt":"2021-04-19T10:44:11","slug":"how-municipalities-make-money-from-property-owners-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/484107\/how-municipalities-make-money-from-property-owners-in-south-africa\/","title":{"rendered":"How municipalities make money from property owners in South Africa"},"content":{"rendered":"<p>South Africa\u2019s 257 municipalities are tasked with ensuring that communities across the country receive a variety of services, including sewerage &amp; sanitation, water, electricity and refuse removal.<\/p>\n<p>Data published by Statistics South Africa shows that\u00a0local government receives the bulk of its money from two main sources.<\/p>\n<ul>\n<li>First, from national and provincial government who transfer money to municipalities on a regular basis &#8211; referred to as grants and subsidies or transfers.<\/li>\n<li>Secondly, from homeowners, businesses and industries who pay service charges and property rates.<\/li>\n<\/ul>\n<p>The chart below shows municipal income over time, broken down into grants and subsides (blue), service charges &amp; property rates (orange) and other income (grey).<\/p>\n<p><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-484115 aligncenter\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal.jpg\" alt=\"\" width=\"1163\" height=\"916\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal.jpg 1163w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal-300x236.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal-1024x807.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Municipal-768x605.jpg 768w\" sizes=\"auto, (max-width: 1163px) 100vw, 1163px\" \/><\/a><\/p>\n<p>&#8220;At first, this might seem to indicate that municipalities are in a good financial position, that they are able to generate the bulk of revenue themselves.<\/p>\n<p>&#8220;However, as with all complex systems, there is some detail that needs to be unpacked. The local government landscape is dominated by eight large metropolitan municipalities who, as a group, contribute about 60% to total municipal income,&#8221; Stats SA said.<\/p>\n<p>As urban centres, these cities are able to generate the bulk of their income from service charges and property rates.<\/p>\n<p>Due to their collective size, they have a large influence on the trend reflected in national aggregates.<\/p>\n<p>&#8220;The much smaller, rural municipalities are typically more dependent on grants and subsidies than they are on other income sources,&#8221; it said.<\/p>\n<p><strong>Peaks and troughs\u00a0<\/strong><\/p>\n<p>Stats SA said that the &#8216;peaks and troughs&#8217; on the graph represent seasonal patterns in municipal income.<\/p>\n<p>The biggest source of income in the service charges and property rates category is<strong> sales of electricity, which contributes about a quarter of total municipal income<\/strong>.<\/p>\n<p>When sales of electricity rises and falls, it has a noticeable effect on total income, it said.<\/p>\n<p>&#8220;Many municipalities act as intermediaries in the South African electricity sector: they buy power from Eskom and resell it to consumers.<\/p>\n<p>&#8220;Electricity demand is seasonal, rising in winter and mellowing out over the summer months. Municipalities typically see a peak in sales of electricity in the quarter ending September.&#8221;<\/p>\n<p>&#8220;Not only does the colder weather play a role in this quarter, but municipalities also implement annual tariff increases in July each year.&#8221;<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/property\/482825\/can-south-africans-run-a-airbnb-from-their-complex-or-estate\/\" target=\"_blank\" rel=\"noopener\">Can South Africans run an Airbnb from their complex or estate?<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africa\u2019s 257 municipalities are tasked with ensuring that communities across the country receive a variety of services, including sewerage &#038; sanitation, water, electricity and refuse removal.<\/p>\n","protected":false},"author":10,"featured_media":103729,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[26],"class_list":["post-484107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/484107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=484107"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/484107\/revisions"}],"predecessor-version":[{"id":484127,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/484107\/revisions\/484127"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/103729"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=484107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=484107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=484107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}