Cape Town Mayor Geordin Hill-Lewis today announced that 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, he said while the 2025-’26 Budget was designed to bring relief to households with an income under R2,5 million, the City was looking at additional support to owners of properties valued at up to R7 million 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 R5 million cut-off, raising pensioner rebate-qualifying criteria higher than the current R22 000 monthly income and reducing City-wide Cleaning charges for properties from R2,5m to R7,5m
“The criticism I’ve heard, and which I really wholeheartedly accept, is that not everyone in the R4 million to R7 million property band is wealthy, or cash-flush,” Hill-Lewis said. “You may have bought your home a long time ago, you’ve paid it off and 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.”
A press release from the City of Cape Town states: “Cape Town’s Invested in Hope Budget includes a South African-record infrastructure investment of R39,7 billion 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 Cape Town has the most inclusive indigent- and pensioner-support package while still maintaining a lower monthly bill for ratepayers by comparison, across a range of household scenarios.
“In other metros residents are paying more and more for broken services and collapsing infrastructure,” Hill-Lewis pointed out. “By 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.”
Electricity price relief
Besides 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 R3 million to R7 million 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,” Hill-Lewis said.
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 the Treasury’s new incentive grant and a share of the performance-based R54 billion available over six years, which can go towards further infrastructure investment and service enhancements.
Water and sanitation reforms
According to the media release water-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 (15 kl) and sanitation (10,5 kl), the highest allocation of SA’s metros.
“Previously, affluent and lower income households paid the same fixed charges based on meter-connection size,” the release said. “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.”
Monthly bills lower says City
According to the City of Cape Town it 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.
“Comparing common consumption scenarios of 10-30 kl of water and 600-850 kWh 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. While 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 a more-than-R700 lower bill than a R2 million home in Johannesburg, based on 2025-’26 rates and tariffs for each city.”
