City of Cape Town makes changes after 20% rate hike angers homeowners
Mayor Geordin Hill-Lewis has announced significant changes to the City of Cape Town's 2025/26 budget, aimed at easing financial pressure on middle-income and pensioner households while maintaining the city's record-breaking R40 billion infrastructure investment.
Speaking at a council meeting on Wednesday, 28 May, the mayor unveiled expanded rates relief measures, following public feedback on the original March budget draft.
The revised budget will now undergo a second round of public comment from 28 May to 13 June.
'We listened carefully to Capetonians. The changes we're tabling preserve protection for families in lower-value homes while considerably softening tariffs for the middle class,' said Hill-Lewis. First R450 000 of property value now rates-free for homes up to R7 million (previously R5 million)
for homes up to (previously R5 million) Pensioner income threshold raised to R27 000 per household/month , regardless of property value – the broadest support criteria in South Africa.
to , regardless of property value – the broadest support criteria in South Africa. City-wide cleaning charges significantly reduced for homes under R20 million , with a new 100% pensioner rebate
for homes under , with a new Lower fixed water charges for homes valued between R1 million and R25 million
As a result, average monthly bill increases compared to the March budget draft will be significantly reduced: R1.2m home : up to 15% lower
: up to R2m home : up to 24% lower
: up to R3-R4m homes : up to 33% lower
: up to R5-7m homes: up to 40% lower
Electricity pricing will also drop across the board due to the removal of the 10% city-wide cleaning cost from electricity tariffs.
Households using average or higher volumes of electricity and water may even see net reductions in their monthly bills.
Hill-Lewis added that high-value properties with very low utility usage, often equipped with solar and borehole systems, may still experience increases over 20%.
However, these households are encouraged to sell excess solar power back to the municipality in exchange for bill credits or cash.
The Mayor emphasised that fixed charges remain essential to ensure fair contributions across the income spectrum and to fund Cape Town's long-term infrastructure needs.
'We can't run a city where a R50 million household contributes the same fixed amount as a R500 000 one. That's regressive taxation,' he said.
The city is transitioning away from the unpopular 'pipe levy' system toward a property value-based fixed charge, with most homes under R2.5 million expected to pay less than under the old model. R40 billion infrastructure budget maintained
Despite the economic pressure, Cape Town will maintain its R40 billion infrastructure investment, the largest municipal capital budget in South Africa, with 75% allocated to benefit lower-income households.
Key investments include: Over 700 new law enforcement officers
R4.5bn for MyCiTi expansion to Khayelitsha and Mitchells Plain
R2bn for water and sewer pipe upgrades
R3.5bn for road repairs and upgrades
R3.4bn for informal settlement upgrades
R1bn for streetlight repairs
R2bn for CRU rental upgrades
R397m for public transport station upgrades
R272m for informal trading infrastructure
Hill-Lewis highlighted that despite Cape Town's higher average property values, the city still offers the lowest average municipal bills among South African metros, with better services and infrastructure.
'Here, residents pay lower bills and get a city that works. Even after adjusting for higher property values, Cape Town's bills remain lower than Johannesburg's across most property bands.'
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