This research paper illustrates that accurate and truthful capacity assessments are a fundamental phase of any capacity building process, and that capacity assessments play a fundamental role in reaching the necessary performance efficiency. Service delivery performance enhancements by municipalities are becoming increasingly necessary. At the same time, however, the majority of municipalities in South Africa find themselves under-capacitated. Some municipalities are aware of the lack of capacity within their organisation, but are unable to identify, define and quantify these shortcomings. Many other municipalities are not aware of their capacity shortfalls. In both cases, this is often caused by the lack of necessary systems and procedures to assess the different dimensions of organisational capacity. In this regard, this research paper introduces a proposed Subjective Municipal Capacity Self-Assessment Model (SMCSAM) as an alternative solution to the current practices of the Municipal Demarcation Board. It is intended that this model be used internally by municipalities to sustain internal capacity building and performance enhancement initiatives.