The City of Cape Town is opening a supplementary round of public participation on amendments to the 2026/27 Budget, necessitated by a Western Cape High Court ruling that the Metro’s tariff structures were unlawful. 

Deciding against appealing the ruling, the City says it will publish these amendments for public comment today, with the comment period running from 27 May to 10 June 2026. This should allow the City sufficient time to adopt a budget before the financial year begins on 1 July 2026, as required by law.

Mayor Geordin Hill-Lewis maintains that the court ruling limits the ability of the City – and all municipalities – to cross-subsidise to protect lower- and middle- income households.

“A key impact of this court ruling is what we’ve warned all along: that water and sanitation fixed charges will go up for many families in lower- and middle-value residential properties, and go down for higher-value properties.”

 

Hill-Lewis says they have now proposed a further raising of the rates-free rebate to the first R620 000 of property value, up from R450 000, for residential properties under R8m. All indigent benefits will also apply up to R620 000 residential property value.

He says this will reduce property rates for many households in the lower- and middle-value bands to mitigate the rise in charges they will face because of the court ruling.

The Mayor has also rejected calls to make cuts to any of Cape Town’s essential infrastructure projects to balance the budget.

Other proposed amendments to be published for comment include:

• City-wide cleaning costs to move back into property rates, instead of a stand-alone charge. This will change the -10,2% reduction in rates tabled in March, before the High Court ruling.
• Commercial property rates will also increase, while electricity unit costs will reduce due to the phased reduction of the surcharge contribution to city-wide cleaning.
• Residential electricity tariffs remain unchanged as these customers no longer contribute to city-wide cleaning in this way.
• Fixed Water and Sanitation charges revert to the water meter connection size. This was the method before the use of property value bands.

The impact of the ruling does not affect the expenditure aspects of the tabled budget, and no new comment is invited in that regard.

Hill-Lewis added that they will engage the National Treasury and Co-operative Governance departments nationally to seek regulatory clarity on available options for municipalities to equitably cross-subsidise lower- and middle-income households, given the Court’s rejection of property-value bands as a means of achieving this.