Quarterly Briefing On Municipal Property Valuations and Rates
Geopolitical tremors, natural disasters, and rising costs – a turbulent season for South Africans.
Global and local pressures are converging in ways that will be felt squarely in South African pockets. Tensions between the United States and Iran remain high, rattling oil markets and injecting fresh uncertainty into an already fragile global economy, with ripple effects that extend all the way to the petrol pump.
Closer to home, the Eastern Cape and the Garden Route have been battered by severe floods and destructive winds, leaving communities reeling. Eskom continues to face challenges in restoring electricity supply to some of the affected and remote areas. We commend the emergency workers and organisations that have stepped in to assist those in need.
As if the timing could not be worse, municipalities across South Africa are preparing to implement a fresh round of tariff increases from 1 July, with households facing higher bills for electricity, water, rates and refuse removal at a time when budgets are already under pressure.
National Treasury issues Municipal Budget Circulars to guide municipalities in the compilation of their Medium Term Revenue and Expenditure Framework (MTREF). The circulars can be accessed at the National Treasury website (https://mfma.treasury.gov.za/Circulars/).
The process is linked to Municipal Budget and Reporting Regulations (MBRR) and the Municipal Standard Chart of Accounts (mSCOA), and supports the municipal budget process by ensuring that minimum requirements are met.
Circulars 132 and 134 focus on the 2026/27 budget cycle. Municipalities are required to focus on a number of key “game changers”, including ensuring funded budgets, adherence to supply chain management processes, and addressing audit findings.
National Treasury has also developed a Cost Reflective Tariff Tool to assess whether municipal tariffs are cost-reflective. Significant tariff shortfalls must be phased in over a period of two to three years.
The projected CPI for 2026/27 is 3,4%, and municipalities are required to justify all tariff increases that exceed the projected inflation target. Property rates increases for the metros and selected larger local municipalities are set out below:
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