If you own a sectional title flat in Cape Town and have ever looked closely at your rates account, you may have noticed that your garage section is rated differently from your residential unit. Specifically, it does not enjoy the full residential rebate. Here is why.
How the City of Cape Town's residential rebate works
Under the City of Cape Town's Rates Policy, all residential properties benefit from a statutory reduction of R15 000 on the municipal value before the rate-in-the-rand is applied. This is prescribed by legislation and applies across the board.
In addition to this, from 1 July 2026, residential properties with a municipal value of R8 million or less qualify for a further rebate of R485 000. Together, these two reductions amount to a total rebate of R500 000 off the property's rateable value. This represents an increase from the previous total rebate of R450 000 that applies up to 30 June 2026.
The key condition: primary place of residence
The R485 000 additional rebate is linked to a specific qualification. The section must be used as a primary place of residence. This is where the garage falls short.
A garage section in a sectional title scheme is notarially (or via the management rules) tied to the residential flat it serves. For rating purposes, it therefore attracts the residential rate-in-the-rand rather than a commercial or other category rate. That much works in the owner's favour.
A garage, however, is not a primary place of residence. You live in your flat. You park in your garage. The two are legally and physically distinct sections on the sectional plan, each with its own participation quota and individual municipal value. |
Applying the full R500 000 rebate to both the flat and the garage would therefore constitute a double rebate. The rates policy is designed to provide relief to the occupant of a home, not to every section associated with that home.
What this means in practice
Your garage section will benefit from having the residential rate in the Rand applied to its municipal value, but won’t receive an additional residential rebate, as it doesn’t constitute a primary place of residence.
If the rates calculator on the City's website appears to show the R15 000 reduction on your garage, it is calculating incorrectly.
Questions about your property's rates?
Understanding how rates are applied across multiple sections in a sectional title scheme can be complex, particularly as municipal values change with each new general valuation cycle. If you have concerns about the valuation of your property or the rates being applied, we are here to help.
Contact Steer & Co on 021 426 1026 or email valuations@steer.co.za. We are registered professional valuers based in Cape Town, and this is exactly the kind of thing we do every day.
