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Guide · Municipal rates

How are municipal rates recovered from tenants?

By Chris Rencken · Last reviewed 17 October 2026

Municipal property rates are imposed on the owner of a property, not the tenant. A landlord can recover rates from you only if your lease allows it, and your share is calculated using the method the lease sets out. Three questions therefore matter: what the municipality charged, what your lease allows the landlord to recover, and how your share is worked out.

Three separate things

1. The owner's liability. Under the Municipal Property Rates Act, a municipality levies rates on the owner, based on the property's market value in the municipal valuation roll and the rate in the rand for its category, such as business or commercial.

2. The landlord's right to recover. Whether rates are passed on to you is a matter of contract. Some leases include rates in a gross rental. Others recover them separately, in full or only the increase above a base year.

3. The allocation method. Many leases allocate rates according to the tenant's area as a proportion of a defined building area. Check both figures, how the lease defines them, and whether the landlord has adjusted the calculation for vacant or newly developed space. Some leases instead use a participation quota, an agreed percentage or another formula.

Worked example (illustrative)

The figures below are fictional and for illustration only.

The building and its values below are fictional; the rate is eThekwini's actual 2026/27 rate for the Business and Commercial category, 3.7275 cents in the rand, and excludes any rebates.

A building has a municipal value of R60 million. The annual rates bill is R60 million x 3.7275 cents per rand = R2,236,500. A tenant whose lease allocates 5% of the rates pays R111,825 a year, or R9,318.75 a month.

The owner objects to the new valuation, and it is reduced to R54 million. The rates bill becomes R2,012,850, and the tenant's 5% share falls to R100,642.50 a year: R11,182.50 a year, or about R932 a month, less.

Whether that reduction reaches the tenant, and from when, depends on the lease and on how the landlord applies the municipality's adjustment.

New valuation rolls: an eThekwini example

Municipalities must prepare a general valuation roll at least every four years, and values can also change through supplementary valuations in between.

In eThekwini, the 2026 General Valuation Roll took effect on 1 July 2026. The municipality has said that where an objection changes a property's market value, the rates adjustment applies retrospectively from 1 July 2026, and may increase or decrease what is payable.

If your building's valuation was reduced, check whether your lease means that reduction should be reflected in your recoveries. Do not assume that every reduction automatically produces a refund for every tenant; the lease decides.

What to check

1. The municipal account. Ask for the municipality's rates account, not the landlord's summary. Check the valuation, the category and the rate in the rand.

2. Your share. Check the areas or percentage used against the lease, and whether they changed after an extension, a subdivision or a change in vacancy.

3. Valuation changes. Has the building been revalued under a general or supplementary valuation, and has any objection or appeal outcome been passed on in line with the lease?

4. Rebates and credits. If the municipality granted a rebate or credit on the account, check whether the lease means it should be reflected in your recoveries.

5. Other municipal charges. Refuse, sewerage and special rating area levies (sometimes called city improvement district levies) are separate charges. Check that each one is recoverable under your lease.

For reference: rates differ between municipalities

Each municipality sets its own rate in the rand for each category of property, effective from 1 July. For the business and commercial category in 2026/27:

These rates are not directly comparable, because each applies to values on that municipality's own valuation roll, and rolls are prepared at different times. Cape Town's rates are levied on its 2025 General Valuation Roll; eThekwini's on its 2026 roll. Rates also change every year: Johannesburg, for example, approved a 3.6% increase in property rates for 2026/27. When your rates recovery changes on 1 July, check whether the change came from the rate, the valuation, or both.

Documents to request

• The municipal rates account for the building for the months concerned.
• The lease clauses on rates and on how your share is calculated.
• Any notice of a new valuation, and the outcome of any objection or appeal.

Want your rates recovery checked?

A TenSure Check tests the rates you pay against the municipal account and what your lease allows. Start with a TenSure Check or see a sample report.