The City of Cape Town has revised its draft 2025/26 budget following widespread public opposition to steep municipal bill increases.
Some households are facing hikes exceeding 20%, with others nearing 30%. The R84.1 billion budget’s public comment period closed on Friday.
Mayor Geordin Hill-Lewis said the City is developing relief measures—particularly for middle-income homeowners and pensioners—within the R39.7 billion infrastructure-focused portion of the budget.
From July, the City is proposing an average property rates increase of nearly 8% for both residential and commercial properties. However, fixed charges for water, electricity, sanitation, and waste removal are now tied to property value, rather than infrastructure size.
Speaking on CapeTalk, Hill-Lewis confirmed the City is “actively modelling expanded rebates” for properties valued up to R7 million, extending beyond the current focus on homes under R2.5 million.
The draft budget has drawn sharp criticism from the City of Cape Town Collective Ratepayers’ Association (CTCRA), which called it ‘fiscally reckless, legally indefensible, and deeply unfair to the residents who fund the metro’s prosperity.’
Representing more than 45 ratepayer and community associations, the CTCRA launched a petition that has already gained over 12,000 signatures. It calls for levy increases to be kept in line with inflation, which is currently below 3%.
Concerns have been particularly strong among residents with properties valued between R4 million and R7 million, who say the new charges are unaffordable despite high property values.
“The criticism that I’ve heard, and which I really wholeheartedly accept, is that not everyone in the R4 million–R7 million property band is wealthy,” Hill-Lewis said.
“You may have bought your home a long time ago, you’ve paid it off, now you have a very valuable home, but you don’t have the income to match it,” the mayor said.
“I really take that point, and so we are modelling a number of measures to increase rebates to those homes, and also to reduce the impact of the City-Wide Cleaning charge.”
Relief Measures Under Review:
- Extending the R450,000 rates-free threshold beyond the R5 million property cap
- Raising the pensioner rebate income limit from R22,000 to R27,000/month
- Reducing City-Wide Cleaning charges for properties valued between R2.5 million and R7.5 million
The City has limited Eskom’s 11.32% electricity price hike to just 2% for most residents by scrapping a 10% surcharge and introducing a new ring-fenced cleaning tariff. While this has raised costs for some, Hill-Lewis argued that the net effect may still reduce household bills.
“Total bill increases can drop dramatically when taking electricity usage into account due to the major price relief in Cape Town,” he said.
Water and sanitation charges have also been restructured, with 140,000 lower-income households seeing minimal or no increases. In addition, 250,000 homes valued under R500,000 will continue receiving free basic services.
While the overall rates increase is pegged at 7.96%, high-value property owners could face far steeper bills. About 40,000 households fall within the R4 million–R7 million bracket.
“There are larger than usual proposed increases for more valuable properties,” said Hill-Lewis. “The huge majority will see very reasonable single-digit increases,” stressed.
Some homes under R1.5 million may even see decreases, while those between R2.5 million and R4 million are expected to face low double-digit increases. Still, for many residents, the changes remain unaffordable.
Hill-Lewis defended the focus on infrastructure and service delivery, including expanded law enforcement, cleaner public spaces, and a record R39.7 billion infrastructure spend over three years.
“These enormously expensive projects must be funded if we’re to avoid the kind of infrastructure collapse seen in other cities,” he said.
The City also cited a cumulative R2.5 billion reduction in national grants as a key budgetary pressure. The cross-subsidisation model remains central, with higher-value properties subsidising lower-income households.
Calls for a flat-rate billing system were rejected, with Hill-Lewis arguing such a model is unworkable in a city where 25% of homes are valued under R1 million and many are outside the formal rates base.
The mayor reiterated the City’s commitment to balancing urgent infrastructure investment with long-term affordability to maintain Cape Town’s economic resilience.
Deon van Zyl, chair of the Western Cape Property Development Forum, acknowledged the City’s ambition to play catch-up on bulk services provision.
“The increased apex investment follows decades of underinvestment, bringing Cape Town to the brink of the same infrastructure crisis playing out in other metros across the country. Hopefully, this can now be averted.”
“To fund the increased expenditure on infrastructure, some creative thinking has led to the introduction of a wealth tax: service availability charges linked to the value of the property and not the scale of the service being provided.”
‘Those that can, will pay more’ seems to be the standard government response across all spheres, not least at local authority level, as seen in the recent attempted VAT increase at national government level, he added.
“Rumour is that enormous rate payer pressure is already causing some tinkering with the numbers in City Hall, which may lead to a second Draft Budget,” said Van Zyl.
