Once your newly-purchased home registers in your name, your local council will start billing you for rates and taxes relating to your property. These fees become applicable when the property registers in your name, regardless of whether you have moved in or not.
Rates and taxes are fees paid to the authority that services your property, i.e. your local municipality. These funds are used to pay for municipal services like sewerage facilities, road maintenance, street light maintenance, and refuse collection.
You are responsible for opening your municipal account at your local council and paying a consumer deposit. Ensure that you provide the correct billing address; if you do not receive the statement every month, you must enquire at the council to rectify this. Remember to start paying an amount from the first month, even if you have yet to receive your account, to ensure that you don't end up with a huge bill to settle once your account is sorted out.
You may find the municipal bill confusing if you are a first-time buyer or have moved to a different municipal area. Terminology differs from one municipality to the next, so they may use new terminology that you are not acquainted with yet. To understand what it all means and what you are being billed for, let’s look at all the information you may come across.
When you own property, you will receive water, electricity, and waste removal services. Your municipal account includes these fees and the property taxes you must pay.
Let’s look at each of these items and why you are paying for them:
Each municipality has their tariffs, which are used to calculate their rates. The basic calculation is: house value – rebate * rate / 12 = the monthly amount payable to the council.
Here is an example of all the major municipalities where we develop houses using a house value of R1 000 000.
|City of Joburg||Emfuleni Local Municipality||Midvaal Local Municipality||City of Tshwane||Ekurhuleni Metropolitan Municipality||Mogale City Local Municipality|
|R1 000 000 (house value)- R350 000 (rebate) x 0.008619 (tariff)= R5 602.35 / 12Monthly amount payable is:R466.86||R1 000 000 (house value)- R135 000 (rebate) x 0.008500 (tariff)= R7 352.50 / 12Monthly amount payable is:R612.70||R1 000 000 (house value)- R135 000 (rebate) x 0.009618 (tariff)= R8 319.57 / 12Monthly amount payable is:R693.28||R1 000 000 (house value)- R135 000 (rebate) x 0.0102400 (tariff)= R7 475 20 / 12Monthly amount payable is:R622.93||R1 000 000 (house value)- R150 000 (rebate) x 0.01052 (tariff)= R8 942 /12Monthly amount payable is:745.17||R1 000 000 (house value)- R50 000 (rebate) x 0.01467 (tariff)= R13 936.50 / 12Monthly amount payable is:R1 161.38|
Note that the above rates are calculated using RESIDENTIAL TARIFFS.
Vacant land tariffs are more expensive.
Tariffs are subject to change every year.
Rates are payable from the date of registration.
The rebate amount is the discount that a council gives to all homeowners.
At this point, the council will adjust rates, so they will work out the difference between what you paid under the vacant land tariff and what you should have paid under the residential rate, which is usually slightly lower. Usually, if you pay the higher vacant land tariff, you will receive a refund or credit on your account. You will also receive a small assessment rebate that all property owners receive – the exact amount varies from one council to another.
All the charges and terminology on your municipal account can be confusing, especially if you are a new homeowner. Take the time to study your account and use your local council's support line or website to help with any queries.
Lastly, please do not tamper with municipal services (e.g., electrical or water meters, water, electrical or sewerage lines, street lights, concrete around the kerb, etc.). Report any issues with these services to your local council.
Please note that this information is intended as an advisory guide only and does not replace the guidance provided by your local council. Each council uses its own terminology, and this can change without notice.
The recommendations herein are given in good faith and are meant to guide the user. The recommendations imply no guarantee since the conditions of use and method of application are beyond our control.