How Municipalities Make Money From Property Owners In South Africa

SOUTH Africa’s 257 municipalities are tasked with ensuring that communities across the country receive a variety of services, including sewerage & sanitation, water, electricity and refuse removal.

Data published by Statistics South Africa shows that local government receives the bulk of its money from two main sources.

• First, from national and provincial government who transfer money to municipalities on a regular basis – referred to as grants and subsidies or transfers.
• Secondly, from homeowners, businesses and industries who pay service charges and property rates.

The chart below shows municipal income over time, broken down into grants and subsides (blue), service charges & property rates (orange) and other income (grey).

“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.

“However, as with all complex systems, there is some detail that needs to be unpacked. The