The City of Cape Town is planning to extend municipal rate relief to more homeowners and pensioners as part of efforts to soften the impact of rising municipal bills in the 2025/26 financial year.

Mayor Geordin Hill-Lewis announced the proposed measures during an interview on CapeTalk on Tuesday morning, saying the budget is designed to help households, particularly those with properties under R2.5 million, but that additional support for homes up to R7 million is also being considered.

“The criticism that I’ve heard, and which I really wholeheartedly accept, is that not everyone in the R4m – R7m property band is wealthy, or cash-flush. You may have bought your home a long time ago, you’ve paid it off, 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,” said Mayor Hill-Lewis.

Expanded Rebates Under Review

The City is currently modelling three key support measures:

• Expanding property rates relief by extending the ‘first R450 000 rates-free’ benefit to more homes beyond the current R5 million cut-off.
• Raising the pensioner rebate qualifying criteria above the current R22 000 monthly income.
• Reducing City-Wide Cleaning charges for properties valued between R2.5 million and R7.5 million.

The proposals come amid Cape Town’s ambitious Invested in Hope Budget, which includes a record R39.7 billion investment in infrastructure over three years. The City also plans significant boosts to its safety and cleaning services and has already introduced electricity price relief.

Electricity Relief for Households

“While many households in the R3m – R7m 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,” said Hill-Lewis.

Cape Town has cut Eskom’s 11.32% national electricity price hike to just 2% for Domestic and Home User customers. This is possible because the City has ended the practice of using 10% of electricity sales to fund unrelated services like area cleaning. Instead, cleaning services will now be funded via a ring-fenced tariff, in line with the National Treasury’s Trading Service Reform Programme.

Water and Sanitation Reforms to Benefit Lower-Income Households

Water and sanitation reforms will bring relief to around 140,000 lower-income homes, while another 250,000 rateable households under R500,000 continue to receive free basic services — 15KL of water and 10.5KL of sanitation — the highest free allocation of any South African metro.

Linking fixed water and sanitation charges to property values, rather than meter connection size, is expected to bring further relief to larger, lower-income households.

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