Cape Town set to soften tariff increases for higher value properties

Cape City Mayor Geordin Hill-Lewis says the town is seeking to prolong charges rebates to extra property house owners and pensioners to cushion annual municipal invoice will increase for 2025/26.

Hill-Lewis mentioned that whereas the 2025/26 funds was designed to convey aid for households below R2.5 million, the town was taking a look at further help to house owners of properties as much as R7 million to mitigate potential month-to-month invoice will increase arising from tariff reforms and important multi-billion rand infrastructure investments.

Help measures at present being modelled by the town embody:

· Increasing property charges aid by extending the ‘first R450 000 rates-free’ profit to extra houses past the present R5m cut-off
· Elevating pensioner rebate qualifying standards increased than the present R22 000 month-to-month earnings
· Decreasing Metropolis-Large Cleansing costs for properties from R2.5m to R7.5m

‘The criticism that I’ve heard, and which I actually wholeheartedly settle for, is that not everybody within the R4m – R7m property band is rich, or cash-flush.

‘You’ll have purchased your own home a very long time in the past, you’ve paid it off, now you will have a really priceless dwelling however you don’t have the earnings to match it.

‘I actually take that time, and so we’re modelling quite a lot of measures to extend rebates to these houses, and in addition to cut back the impression of the Metropolis-Large Cleansing cost,’ mentioned Hill-Lewis.

Cape City’s Invested in Hope Price range features a South African-record infrastructure funding of R39.7 billion over three years, alongside main expansions to policing and cleansing operations, in addition to electrical energy value aid.

Town has additional revealed analyses of the varied budgets for different main cities exhibiting that Cape City has probably the most inclusive indigent and pensioner help package deal, whereas nonetheless sustaining a decrease month-to-month invoice for ratepayers in comparison with different cities throughout a spread of family situations.

‘In different metros, residents are paying an increasing number of for damaged companies and collapsing infrastructure. In distinction, Cape City is investing 63% extra in infrastructure than Joburg over the subsequent three years whereas nonetheless providing considerably decrease month-to-month payments. To proceed being a metropolis of hope, it’s critical that we maintain the course on main investments for higher water, sanitation, electrical energy, roads and group infrastructure in our metropolis,’ mentioned Hill-Lewis.

Electrical energy value aid

Apart from plans to increase the town’s charges aid web to extra householders and pensioners, Cape City’s main electrical energy value aid is already set to learn households throughout the property worth spectrum, with Eskom’s 11.32% nationwide improve diminished to only 2% for Cape City’s Home and Dwelling Person clients.

‘Whereas many households within the R3m – R7m band are seeing unusually excessive invoice will increase this 12 months attributable to tariff reforms and important infrastructure programmes, whole invoice will increase can drop dramatically when taking electrical energy utilization under consideration because of the main value aid in Cape City serving to particularly increased consumption households,’ mentioned Hill-Lewis.

Town’s electrical energy value aid is made attainable by discontinuing the ten% price of every electrical energy unit to fund different metropolis companies, resembling space cleansing.

As an alternative, city-wide cleansing companies can be funded by a ring-fenced tariff, the impression of which is buffered by the financial savings in electrical energy prices. This reform is aligned with the broader Nationwide Treasury-led Buying and selling Service Reform Programme, with a key goal to make sure waste administration companies are sustainably funded by way of ring-fenced tariffs, as is the case with water, sanitation and electrical energy companies.

Cape City’s progress on this regard places the metro in line for Treasury’s new incentive grant, and a share of the performance-based R54 billion accessible over six years which may go to additional infrastructure funding and enhancements to the service.

Water and Sanitation reforms

Water and Sanitation tariff reforms will see round 140 000 decrease earnings houses expertise aid of their water and sanitation payments, starting from a lower to decrease single-digit will increase inside widespread water utilization situations. An additional 250 000 rateable households below R500 000 obtain free primary water (15KL) and sanitation (10.5K), the best allocation of SA’s metros.

Beforehand, prosperous and decrease earnings households paid the identical mounted costs based mostly on meter connection dimension. Linking mounted costs to property worth for 2025/26 will convey notable aid for a lot of decrease earnings households whereas making certain sustainability for water and sanitation companies for a rising Cape City. These reforms will particularly help bigger decrease earnings households with larger meter connection sizes.

Cape City month-to-month payments lowest for 2025/26

The Metropolis of Cape City presents the bottom month-to-month municipal invoice of South Africa’s ‘huge 5’ metros throughout a spread of widespread family situations for properties below R5 million.

When evaluating widespread consumption situations of 10-30kl of water, and 600-850kWh of electrical energy for properties below R5m, Cape City’s whole municipal invoice is lowest most often in comparison with different main cities together with all charges, costs and VAT.

Based mostly on widespread consumption situations, month-to-month municipal payments for Cape City households are considerably decrease than their Johannesburg counterparts:

R1.5m dwelling: R500 – R800 decrease
R3m dwelling: R740– R1 060 decrease
R5m dwelling: R530 – R850 decrease

Whereas it’s usually raised that there’s a appreciable distinction in property values between Cape City and different cities, even when adjusting for a 25% increased property worth in Cape City, a R2.5m Cape City dwelling nonetheless comes out with an over R700 decrease invoice than a R2m dwelling in Johannesburg based mostly on 2025/26 charges and tariffs for every metropolis.