The City of Cape Town has revealed a bold new plan that could offer thousands of financially distressed residents some much-needed relief.
Under the proposal, the city aims to write off R2.2 billion in “irrecoverable” municipal debt for qualifying households, according to News24. The plan targets poor and working-class ratepayers who are deep in arrears and unlikely to ever settle their debts.
According to the city, the move is intended not only to help residents regain financial stability, but also to clean up municipal records and improve future revenue collection.
As reported by News24, the proposal was tabled at a mayoral committee meeting on Tuesday, where it received immediate approval from the City’s executive team.
Households classified as indigent—those meeting specific low-income criteria-would be able to apply for debt relief on arrears accumulated up to 30 June 2022. If approved, residents will be required to remain on the indigent register and stay current with future payments to avoid falling back into debt.
Alderman Siseko Mbandezi, the City’s mayoral committee member for Finance, said the intention behind the plan is to “give residents a fresh start.” He noted that many households fell into arrears during the Covid-19 pandemic and have struggled to recover.
“The high living costs, as well as the additional and consistent substantial electricity tariff increase by Eskom, have put a strain on household budgets. It became particularly challenging for low-income families who are already struggling to make ends meet.”
The city already provides ongoing assistance to indigent households—including free basic water and electricity, subsidised rates, and waste removal. However, officials say historical debt often prevents residents from accessing these services, especially when the arrears are inherited through family property or linked to long-standing accounts.
Under the proposed scheme:
-Residential properties valued between R45,000 and R2.5 million would qualify for a 100% once-off write-off.
-Properties valued between R2.5 million and R7 million could receive a 50% once-off write-off.
-Properties with zero municipal valuation would see all debt written off.
Mbandezi stressed that it is not a blanket write-off. The plan is aimed specifically at households already receiving municipal support and facing genuine financial hardship. “Property owners who can afford to pay – or simply choose not to – won’t be getting a free pass,” he said.
While the initiative promises meaningful relief for many residents, it has raised questions about how the City plans to absorb the shortfall in its budget?
Public comment on the proposal is open until mid-July, and if approved by council, the write-offs could begin in the new financial year.
