The City of Cape Town’s proposed 2025/26 budget has ignited widespread criticism from homeowners and property associations due to a marked increase in property rates and upward adjustments to municipal service tariffs.
Designed to finance key infrastructure projects and improve public services, the City’s draft 2025/26 budget includes an average 7.96% increase in property rates for residential, industrial, and commercial properties. The budget further includes a proposed average increase of 7.36% for refuse collection and 2% for electricity.
Significantly, the City intends to adjust water and sanitation tariffs and implement a city-wide cleaning tariff. According to the draft budget, fixed charges will be introduced to receive a supply of water and sanitation. Crucially, water charges will be determined by property value – not connection size – and the fixed charge for sanitation will be offset by reduced charges for sanitation volumes.
These proposed increases, which purportedly take effect on 1st July 2025, have attracted extensive criticism from various stakeholders. Critics have observed that rising property prices could potentially see higher-value properties slapped with a 20–30% increase for municipal rates and services.
The City has defended the budget by assuring residents that the increases are required to finance R30 billion in essential infrastructure upgrades and investments over the next three years. Further, it argues that Cape Town’s property rates remain on the lower spectrum when compared to other metros.
Critics, however, contend that the increases, particularly the new fixed charges based on property values, are not sufficiently justified and will disproportionately impact persons in higher-value areas, including long-term homeowners and retirees. Moreover, some stakeholders have questioned the legality of linking municipal service charges to property values and suggest that it amounts to an unauthorised tax.
Residents are encouraged to submit their feedback on the draft by budget by Friday, 2nd May 2025 by emailing their comments to budget.comment@capetown.gov.za.
For further information or guidance, contact us at info@stbb.co.za to consult with a Cape Town-based property law attorney.
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