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Cape Town set to soften tariff increases for higher value properties

Cape Town Mayor Geordin Hill-Lewis says the City is looking to extend rates rebates to more property owners and pensioners to cushion annual municipal bill increases for 2025/26.

Speaking on Cape Talk on Tuesday morning, Mayor Hill-Lewis said that while the 2025/26 budget was designed to bring relief for households under R2,5m, the City was looking at additional support to owners of properties up to R7m to mitigate potential monthly bill increases arising from tariff reforms and vital multi-billion rand infrastructure investments.Support measures currently being modelled by the City include: • Expanding property rates relief by extending the ‘first R450 000 rates-free’ benefit to more homes beyond the current R5m cut-off • Raising pensioner rebate qualifying criteria higher than the current R22 000 monthly income • Reducing City-Wide Cleaning charges for properties from R2,5m to R7,5m‘The criticism that I’ve heard, and which I really wholeheartedly accept, is that not everyone in the R4m – R7m property band is wealthy, or cash-flush. 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. 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,’ said Mayor Hill-Lewis on Good Morning Cape Town with Lester Kiewiet.Cape Town’s Invested in Hope Budget includes a South African-record infrastructure investment of R39,7bn over three years, alongside major expansions to policing and cleaning operations, as well as electricity price relief. The City has further published analyses of the various budgets for other major cities showing that Cape Town has the most inclusive indigent and pensioner support package, while still maintaining a lower monthly bill for ratepayers compared to other cities across a range of household scenarios. ‘In other metros, residents are paying more and more for broken services and collapsing infrastructure. In contrast, Cape Town is investing 63% more in infrastructure than Joburg over the next three years while still offering significantly lower monthly bills. To continue being a city of hope, it is vital that we hold the course on major investments for better water, sanitation, electricity, roads and community infrastructure in our city,’ said Mayor Hill-Lewis.Electricity price reliefBesides plans to expand the City’s rates relief net to more homeowners and pensioners, Cape Town’s major electricity price relief is already set to benefit households across the property value spectrum, with Eskom’s 11,32% nationwide increase reduced to just 2% for Cape Town’s Domestic and Home User customers.‘While many households in the R3m – R7m band are seeing unusually high bill increases this year due to tariff reforms and vital infrastructure programmes, total bill increases can drop dramatically when taking electricity usage into account due to the major price relief in Cape Town helping especially higher consumption households,’ said Mayor Hill-Lewis.The City’s electricity price relief is made possible by discontinuing the 10% cost of each electricity unit to fund other City services, such as area cleaning. Instead, City-wide cleaning services will be funded by a ring-fenced tariff, the impact of which is buffered by the savings in electricity costs. This reform is aligned with the broader National Treasury-led Trading Service Reform Programme, with a key objective to ensure waste management services are sustainably funded via ring-fenced tariffs, as is the case with water, sanitation and electricity services. Cape Town’s progress in this regard puts the metro in line for Treasury’s new incentive grant, and a share of the performance-based R54bn available over six years which can go to further infrastructure investment and enhancements to the service.Water and Sanitation reformsWater and Sanitation tariff reforms will see around 140 000 lower income homes experience relief in their water and sanitation bills, ranging from a decrease to lower single-digit increases within common water usage scenarios. A further 250 000 rateable households under R500 000 receive free basic water (15KL) and sanitation (10.5K), the highest allocation of SA’s metros.Previously, affluent and lower income households paid the same fixed charges based on meter connection size. Linking fixed charges to property value for 2025/26 will bring notable relief for many lower income households while ensuring sustainability for water and sanitation services for a growing Cape Town. These reforms will especially assist larger lower income households with bigger meter connection sizes. Cape Town monthly bills lowest for 2025/26The City of Cape Town offers the lowest monthly municipal bill of South Africa’s ‘big five’ metros across a range of common household scenarios for properties under R5 million. When comparing common consumption scenarios of 10-30kl of water, and 600-850kWh of electricity for properties under R5m, Cape Town’s total municipal bill is lowest in most cases compared to other major cities including all rates, charges and VAT. See the full analysis: https://bit.ly/42JDGQw. Based on common consumption scenarios, monthly municipal bills for Cape Town households are significantly lower than their Johannesburg counterparts: · R1,5m home: R500 – R800 lower · R3m home: R740– R1060 lower · R5m home: R530 – R850 lowerWhile it is often raised that there is a considerable difference in property values between Cape Town and other cities, even when adjusting for a 25% higher property value in Cape Town, a R2,5m Cape Town home still comes out with an over R700 lower bill than a R2m home in Johannesburg based on 2025/26 rates and tariffs for each city. Submit comments on the draft Budget before 2 May 2025: • Email: Budget.Comments@capetown.gov.za • Online: www.capetown.gov.za/collaborate; or www.capetown.gov.za/HaveYourSay • Visit Subcouncil offices • Phone: 0800 212 176 End

2025-04-29T22:00:00Z

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