Rates & Taxes in the City of Cape Town
Category Owners Advice
1. What Are Rates & Taxes?
Rates & taxes are the financial liabilities that owners of immovable property must pay on a monthly basis for the basic services delivered by the City of Cape Town. The basic services that rates & taxes pay for include road maintenance, storm drains, pavements (aka sidewalks), rubbish collection, sewerage, street lights and more.
2. How Are Rates & Taxes Calculated in the City of Cape Town?
According to the Department of Cooperative Governance & Traditional Affairs, the rates paid by property owners in Cape Town are calculated by multiplying the market value of immovable property by a Cent amount in the Rand which the municipal council has determined. Municipal rates are calculated using the following formula:
((Municipal Value - Rebate) x Cent in the Rand) ÷ 12 = Monthly Rates
3. What is the Difference Between Rates & Taxes and Utilities?
Utilities (water and electricity) services delivered using municipally-owned infrastructure are not included in rates & taxes. Water and lights are paid for individually based on the amount of water or electricity consumed. Reducing and optimising consumption patterns will help to reduce your overall spending but it will have no bearing on your rates & taxes.
4. What is the Difference Between Rates & Taxes and Levies?
If your property or the property you wish to buy is a sectional title (part of a complex or apartment block) then you will be paying levies each month. Levies are paid to the body corporate to cover maintenance and upkeep of common property such as gardens, security features, and so forth. Levies no longer include rates & taxes.
5. What Happens If You Don't Pay Rates & Taxes?
If one's municipal rates & taxes account should go into arrears due to nonpayment, the municipality is within their rights to withhold utility service provision. According to the Municipal Systems Act, 32 of 2000 a municipality may consolidate accounts. That means that even if one's electricity account is not in arrears, but the municipal rates account is - the city is entitled to consider the property owner in arrears and withhold electricity service delivery until such a time as all outstanding payments are received.
Author: Paul Wasson
