The City of Cape Town says it has tabled expanded rates relief measures and other changes to the proposed ‘Invested in Hope’ Budget for 2025/26.
The initial budget proposal sparked significant backlash from city residents, especially those owning properties valued between R4 million and R7 million – which faced increases of up to 20% in municipal rates.
In his address to the City Council on 28 May, mayor Geordin Hill-Lewis said that changes to the budget will result in ‘meaningfully lower increases to bills’.
“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 Hill-Lewis.
Importantly, the ‘first R450 000 rates-free’ benefit to all homes up to R7 million property valuation (up from R5 million).
Expanded relief measures include:
-More pensioners to benefit by raising the qualifying threshold to R27 000 monthly income per household (up from R22 000), regardless of property value
-Significantly reducing City-wide Cleaning charges for all residential properties under R20m compared to the tabled March 2025/26 budget.
-Lower fixed water charges for property value bands between R1 million and R25 million 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):
-R1.2 million home: up to 15% lower
-R2 million home: up to 24% lower
-R3 million – R4 million homes: up to 33% lower
-R5-7 million homes: up to 40% lower
“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 mayor said.
“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.”
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, he said.
“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 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, 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.
Mayor Hill-Lewis said the City is spending more on infrastructure than all three Gauteng metros combined, 75% of which will directly benefit lower-income households.
The public will have a further opportunity to comment from 28 May to 13 June.
