Who Pays What? Electricity, Levies, Rates and Taxes for South African Landlords

Who pays what on a South African rental property is one of the most common sources of conflict between landlords and tenants and almost all of it is avoidable. Not through luck or good relationships, but through one thing: a clear, well-drafted lease agreement that spells out every financial responsibility before a tenant moves in.

Genevieve learned this from experience. Her second tenant was a good person who kept the property beautifully. But every winter, the electricity bill created tension. Not because either party was wrong, but because the boundaries had not been set clearly enough from the start. That tension, repeated across years, eventually contributed to a decision to sell.

A conversation that should have happened at lease signing became an annual source of friction. Do not let that happen in your property.

Electricity — The Most Common Source of Conflict

Electricity billing on a South African rental property depends on how the property is set up. If the property has a pre-paid meter in the tenant’s name, the responsibility is clear — the tenant buys their own electricity and the landlord has no exposure. This is the cleanest arrangement and worth pursuing whenever possible.

If the electricity is billed through the municipality and comes to the landlord, the lease must specify exactly how it is charged to the tenant, whether at cost, at a marked-up rate, or included in the rental amount. Each approach has implications for your cash flow and your relationship with the tenant.

Seasonal variation is real. A property that costs R800 per month in electricity in summer can cost R1,500 or more in winter in Gauteng. If you are absorbing that cost as a landlord, your numbers need to account for it. Genevieve’s experience of R6,000 to R7,000 in additional annual electricity costs is not unusual for Johannesburg winter months.

Municipal Rates and Taxes

Municipal rates are levied on the property owner not the tenant. As the landlord you are legally responsible for rates regardless of what your lease says. That said, some landlords factor rates into the rental amount to ensure they are covered. This is legitimate as long as the rental is competitive for the area.

Rates can increase annually with municipal tariff adjustments. Your rental review process should account for this.

Levies — Sectional Title and Estate Properties

If your rental property is in a sectional title complex, a block of flats or a residential estate, you will pay a monthly levy to the body corporate or home owners association. This covers shared infrastructure, security, and common area maintenance. Levies are the landlord’s responsibility and cannot be passed directly to the tenant. Though again, they can be factored into your rental pricing.

Levy increases can be significant. Body corporates have the right to raise levies with reasonable notice. A property that cash flows well at current levies may look different after a 15 percent levy increase. Always budget for levy growth when you run your numbers.

What Your Lease Must Specify

A comprehensive South African lease agreement should explicitly state:

• Who is responsible for electricity and how it is billed
• Whether water is included or metered separately
• That rates and levies are the landlord’s responsibility
• The rental amount and whether it is inclusive or exclusive of any utilities
• The process for rent review and notice periods

Under the Rental Housing Act and the 2025 rental law updates, written leases carry stronger enforceability and the Rental Housing Tribunal has expanded powers. A lease that is vague or incomplete exposes you to disputes that are increasingly expensive to resolve.

Watch on YouTube: Who Pays The Utility Bills — Electricity, Levies, Rates and Taxes

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