Comment on Amendments to 2026/27 March Tabled Budget

The City is grateful to all who took time to comment during the public participation on the 2026/27 March Tabled Budget.

Consideration has been given to all inputs received in that process.

This notwithstanding, an implementation of the findings of the recent Western Cape High Court judgment of 30 April 2026, obliges the City to make several material amendments to the rate and tariff structure in the 2026/27 March Tabled Budget.

The City is now inviting public comments on these amendments for consideration, while still ensuring compliance with the statutory deadline for annual budget approval by Council before 1 July 2026. The Western Cape Government’s Minister of Finance has been notified and has given approval for the amended timeline.

The City accordingly invites interested parties to comment on the new amendments now made, as identified below.

Comments must be submitted between 27 May 2026 and no later than 16h30 on 10 June 2026.

Visit www.capetown.gov.za landing page for more information.

Comment:

Email: Budget.Comments@capetown.gov.za

Online: www.capetown.gov.za/collaborate or www.capetown.gov.za/HaveYourSay

Visit: Subcouncil offices

Phone: 0800 212 176

The complete 2026/27 City tariffs are available on www.capetown.gov.za

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

Cape Town’s "City of Hope" Budget draft contains a R40 billion three-year infrastructure budget - a South African record.

Post 2026/27 March Tabling Amendments

An application of the recent ruling by the Western Cape High Court in relation to the City’s 2025/26 Approved Budget has caused the City to make the following proposed amendments to the 2026/27 March Tabled Budget, subject to a supplementary public participation process.

The amendments are as follows:

City-wide Cleaning

In the 2026/27 March Tabled Budget, City-wide area cleansing services were funded by a City-wide Cleaning tariff (applicable to residential properties and vacant land), as well as a contribution from the Rates account, supported by a contribution from electricity commercial sales. Following a review of this Order to give effect to the court judgment, the following amendments are proposed:

City-wide Cleaning for residential properties and vacant land will no longer be recovered through a tariff but instead funded through Property Rates, shown in the table below:

on Electricity contributions to Property Rates for City-wide Cleaning services provided to commercial customers will be phased out

The table below shows the summary of the Property Rates amendments proposed to the 2026/27 March Tabled Budget:

• The funding requirement for City-wide Cleaning (R869 million), including a provision for debt impairment, has been redistributed across all property rating categories;
• The 2026/27 Electricity contribution to Property Rates (for commercial customers only) will be phased out. This results in an additional R200 million increase in Property Rates for commercial type property rating categories, with a corresponding reduction in the per-unit price increase for electricity purchases for commercial customers. A provision for debt impairment has been included in Property Rates; and
• As a result, the overall average energy tariff increase for commercial customers has been reduced to 5.46% (from 6.82% in the 2026/27 March Tabled Budget), while the average residential energy tariff increase remains unchanged at 6.64%. Both of these increases are below the NERSA-approved increase of 9.01%, and reflect a decrease in the c/kWh recovery rate of 4.04c/kWh.

In addition, to mitigate the impact of the implementation of the above, and provide relief where most needed, the Residential Property Rates reduction has been increased to R620,000 (including the statutory reduction), up from R500,000 in the 2026/27 March Tabled Budget.

Further, to accommodate the phasing out of the electricity contribution for commercial properties (above), the Property Rates Rate in the Rand and the Property Rates Ratio have been amended as follows:

Water and Sanitation

Fixed Water and Sanitation charges will revert to being based on water meter size, being the methodology applied by the City prior to the introduction of property value bands methodology.

Fixed charges, based on property value bands have been removed as follows:

overall revenue envelope remains unchanged, the balance between fixed (basic) revenue and consumption-based revenue has shifted, with less revenue now raised by fixed tariffs (declining to approx. 17% of water and sanitation revenue from service charges), and more from consumption charges (approx. 83%).

The reduction in the overall value of fixed basic charges is largely driven by the City’s effort to mitigate the impact on lower- and middle-income properties, achieved by consolidating the fixed tariff for all meter sizes up to 22mm, and by increasing the consumption charge for high-consumption consumers. Consequently, the revised fixed charges are reflected in the table below:

To compensate for this change, consumption-based charges for both Water and Sanitation have increased for high-usage domestic customers compared to the 2026/27 March Tabled Budget, as reflected in the tables below (based on water usage levels).

Minimising the impact of the court judgment

As set out above - To mitigate the impact of higher fixed tariffs for lower value properties (a consequence of the judgement), and provide relief where most needed, the Residential Property Rates reduction has been increased to R620,000 (including the statutory reduction), up from R500,000 in the 2026/27 March Tabled Budget. This has the effect of lowering property rates for lower and mid value properties, to offset the higher fixed water and sanitation tariffs.

The following annexures were reviewed to reflect the above amendments:

Annexure 2 – Draft Property (Tax) Rates 2026/27

Annexure 4 – Draft Revised Consumptive Tariffs, Rates and Basic Charges for Electricity Generation and Distribution, Water and Sanitation and Urban Waste Management Services

Annexure 5 – Draft Rates Policy 2026/27

Annexure 6 – Draft Tariffs, Fees and Charges Book

Annexure 7 – Draft Tariff Policies

Annexure 8 – Draft Credit Control and Debt Collection Policy

Annexure 9 – Draft Indigent Policy