The City of Cape Town has tabled expanded rates relief measures and other changes to the proposed ‘Invested in Hope’ Budget for 2025/26. The public will have a further opportunity to comment from 28 May to 13 June.
In his address to the City Council on 28 May, Mayor Geordin Hill-Lewis said the City had listened carefully to Capetonians during the initial public participation phase and that changes to the budget will result in meaningfully lower increases to bills. See the full speech here.
‘The March budget was designed to protect families living in lower value homes in particular, and was deliberately designed to cross-subsidise this protection from higher value homes. The proposed amendments tabled today preserve that protection for families in lower value homes, but also considerably soften tariffs for the middle class whose feedback and concerns we heard.
‘We have thoroughly examined the budget to find ways to achieve this without compromising the critical and urgent investments required for infrastructure, and without punishing the whole city in years to come by kicking the can down the road instead of doing what is needed now,’ said Mayor Hill-Lewis.
The expanded relief measures are:
- Extending the ‘first R450 000 rates-free’ benefit to all homes up to R7 million property valuation (up from R5m)
- More pensioners to benefit by raising the qualifying threshold to R27 000 monthly income per household (up from R22 000), regardless of property value, SA’s widest criteria for pensioner support.
- Significantly reducing City-wide Cleaning charges for all residential properties under R20m compared to the tabled March 2025/26 budget. A pensioner rebate for City-Wide Cleaning has also been included, which will offer up to 100% off this charge.
- Lower fixed water charges for property value bands between R1m and R25m compared to the March tabled budget draft
The above relief measures will lead to lower total monthly bills compared to the March budget approximately as follows (based on average consumption patterns):
- R1,2m home: up to 15% lower
- R2m home: up to 24% lower
- R3m – R4m homes: up to 33% lower
- R5-7m homes: up to 40% lower
For pensioner rebate beneficiaries, the relief will be even greater. The City’s online rates and tariffs calculator has been updated with these changes and is available for new calculations.
‘Following the relief measures we are tabling today, 97% of ratepayers won’t experience the often-repeated +20% increase in monthly bills, and virtually no one will experience a 30% increase on any reasonable household consumption scenario, let alone the fabled 40% of a recent click-bait report.
‘The 3% of cases where this year’s tariff reforms may lead to an unusually steep increase of over 20%, relate to homes of high value with very low electricity and water usage well-below the average household, likely due to large solar and borehole investments.
‘These are exactly the customers who the City encourages to sell us as much of their excess solar power that they can generate, in exchange for municipal bill credits, and even cash once the total bill reaches zero. They could reduce their overall increases significantly, or even lead to paying no bill at all, if they sold all their excess electricity back to us. We are ready to pay cash for power,’ said Mayor Hill-Lewis.
Electricity price relief remains
Mayor Hill-Lewis said the City will continue with electricity price relief for residential customers, which will benefit households across the property value spectrum.
‘From July, the per unit electricity charge for customers on the Home User and Domestic tariffs is going down. This is made possible by discontinuing the 10% cost embedded in electricity prices that previously paid for city-wide cleaning.
‘We have considered the petition by the Cape Town Collective Ratepayers Association, which calls for the raising of electricity prices instead of a City-Wide Cleaning Tariff. Our modelling shows this will negatively impact households, and that it is better to pursue other means of relief,’ said Mayor Hill-Lewis.
The mayor emphasised that, given this positive impact of electricity price relief for households, it is important to take electricity usage into account for an accurate calculation of your potential total monthly bill increase.
‘The reduction in the per unit cost of electricity will be especially meaningful for larger families with high consumption. For example, when using 750 electricity units in a month – and water between 10-30KL – total monthly bills for homes valued R1m – R3m will decrease by as much as -5%, up to a maximum overall increase of 3%,’ said Mayor Hill-Lewis.
Special ‘Lifeline’ electricity protection also continues for indigent households and pensioners. Lifeline customers using 600 units will still pay roughly the same in 2025 as they did three years ago in 2022/23.
Regarding commercial customers, Mayor Hill-Lewis said the City had heard the points raised by major commercial property owners like SAPOA. The City will allow commercial customers more time to adapt to the phased-introduction of the City-wide Cleaning Tariff. Therefore, in 25/26 commercial customers in particular will continue to contribute to funding the city-wide cleaning service in the way they currently do – via a percentage of their electricity price.
Fixed charges and property value link
Mayor Hill-Lewis said that delivering on these priority investments and major long-term infrastructure requires ‘an element of fixed charges to ensure that all Capetonians make a contribution to infrastructure and stable services’.
‘Municipal infrastructure must be available for everyone, and must always work. To achieve this, costs must be borne by all ratepayers, and not only those who can’t afford to invest in alternative water and electricity sources. Cape Town would not have a working electricity or water service to speak of if the City only charged people for consumption. Many costs are fixed in nature – pipelines, trucks, chemicals, cables, staff to service it all. These costs remain no matter how much people consume, and so fixed costs must be met with a portion of fixed revenue,’ said Mayor Hill-Lewis.
The Mayor further emphasised that Cape Town cannot sustainably fund infrastructure with lower-income and affluent households making equal contributions.
‘Hundreds of thousands of households between R500 000 – R1,5m do make meaningful fixed contributions within their means. But we cannot sustainably run a city where a R50 million household makes the same fixed contribution to water and sanitation infrastructure as a R500 000 household.
‘If a flat charge of say R500 is billed, and one household earns R20 000 while the other earns R100 000 a month, this charge represents 2,5% and 0,5% of their monthly income respectively. This means the impact on the lower-income household is actually five times more than on the higher-income household. Let’s call that what it is – regressive taxation – and we oppose it for the same reason the DA recently opposed the VAT hike, because it hits the poor hardest.
‘Cross-subsidising – where the better off among us help to fund services for the less fortunate – is the only sustainable way to ensure a working city of hope for all. All households – whether low-income or affluent – also contribute 15 cents in every rand of rates paid towards free and basic services to indigent households valued under R500 000.
‘Getting rid of the former ‘pipe levy’ based on pipe size, and basing it now on property value, means that all homes under R2,5m will pay less for their fixed water charges than they would have on the pipe-size system for 25/26. Even when adding the new sanitation charge, 200 000 families in homes under R2,5m will pay less fixed charges for Water and Sanitation together this year, compared to what they would have paid on the pipe-size system,’ said Mayor Hill-Lewis.
R40bn SA-record infrastructure budget remains intact
Mayor Hill-Lewis said the City cannot cut or re-phase its South African-record R40bn infrastructure budget, and that the City was spending more on infrastructure than all three Gauteng metros combined, 75% of which will directly benefit lower-income households.
‘There are no luxury or optional major infrastructure projects in this budget that are not urgently needed. Because we all want a city that is an even better place to live in future, it is important to be honest with Capetonians about the two paths before us.
‘There is the well-trodden path of decline that so many of our country’s cities and towns have sadly followed, and which is now an undeniable daily reality in the form of failing services, collapsed water systems, broken traffic lights, potholed roads, and limping local economies.
‘In Cape Town, we are choosing a different path, one of a functional, successful, working city. A path of progress and a better life for all, where hope flourishes and more residents are lifted out of poverty and into work,’ the Mayor told Council.
The mayor also acknowledged that it is not possible for ratepayers to bear the infrastructure burden alone, which is why the City has worked to improve governance, financial stability, and its credit rating, so that in future the City can borrow more cheaply and tap into the limited national government infrastructure sources which reward merit.
Cape Town offers lowest monthly bills
Mayor Hill-Lewis further emphasised that Cape Town offers the lowest monthly bills for residents alongside the best services and value for money for residents,
‘To sum it up: while ratepayers pay more in other cities and get failing services and infrastructure in return, here in Cape Town they pay lower bills and get a functional, successful city in return.
‘This budget also includes major investments in policing and cleaning operations, electricity price relief, SA’s widest social relief net for households, and still, Cape Town maintains the lowest monthly bills among SA’s cities.
‘This important finding is sometimes dismissed due to higher property values in Cape Town, but consider this: a R1m asset holds the same value regardless of its location. The difference is that in Cape Town, the municipal account for this home will be the lowest in the country, and the asset is more likely to grow in value.
‘Sure, one could buy a bigger property elsewhere for the same price, but your Cape Town asset is in a city that works, that invests to be even better in future, and still you’re paying less than everywhere else,’ said Mayor Hill-Lewis.
The mayor added that, even when adjusting for a 25% higher property value, Cape Town’s monthly bills still come out significantly lower than Joburg for properties all the way from R1m to the upper-middle range, and that this picture will only further improve with the additional support measures announced.
Invested in Hope Budget highlights
- Over 500 new Metro Police Officers spread across every ward in the city.
- Over 200 new Officers to protect service delivery teams from criminals
- 4,5 billion for the new MyCiTi route linking Khayelitsha, Mitchells Plain and various other communities to Wynberg/Claremont
- Bringing down sewer spills and water pipe bursts by replacing 100km of sewer and 50km of water pipes per year, a R2bn project
- Major bulk sewer upgrades such as the Cape Flats sewer upgrade, which is SA’s biggest sewer upgrade project
- Road upgrades, repairs and congestion relief – R3,5bn
- Informal settlement upgrades – R3,4bn
- Street light upgrading and repair – R1bn
- CRU rental unit upgrades and maintenance – R2bn
- Public Transport station upgrades – R397m
- Informal trading infrastructure upgrades – R272m
Comment on the Budget
Comment before 13 June 2025
Online: www.capetown.gov.za/HaveYourSay
Email: budget.comments@capetown.gov.za
Phone: 0800 212 176
In person: Subcouncil office
View the updated Cape Town Rates Calculator: https://web1.capetown.gov.za/web1/rtcalc/
