The City of Cape Town’s revised budget for the 2026/27 financial year, which will be tabled during a council meeting next Monday, 29 June, will put severe financial strain on residents, further impoverishing ordinary salary drawers and loyal ratepayers.
Although the City highlights higher thresholds for poverty relief and a modest 2% reduction in the “Cent amount in the Rand” rate, residents will once again be heavily burdened by property rates and fixed service charges. The “Cent amount in the Rand” rate is the amount of property tax (municipal rates) paid to the municipality for every Rand of the property’s municipal valuation.
The recent general valuation process significantly increased property values, particularly for middle- and higher-income groups – leading to higher rates for households whose income does not keep up with the increases.
This excessive hike in valuations threatens to exclude many qualifying residents and pensioners from essential electricity benefits, with fixed costs for properties valued above R1 million rising to R424,30 per month.
The fixed cost for the residential consumer tariff in Cape Town is currently R390,87 per month.
This amount (excluding VAT) is the result of the new infrastructure levy introduced on 1 July 2025. It is a substantial increase from the previous monthly availability charge of R281,78 — an increase of 38%.
A further increase will take effect on 1 July 2026. The proposed fixed cost amount of R424,30 equals an additional increase of approximately 8,5% (or an extra R33,43 per month) for owners of properties valued at more than R1 million.
The current tariff relief system applicable to indigent paying residents is also unrealistic, as these residents are simply unable to afford the rising fixed service charges, which have increased by up to 68,3% since 2024/25.
This is utterly unaffordable for all ordinary salary drawers, because salary increases do not keep up with such exorbitant tax hikes.
The proposed increase in MyCiTi fares, which will raise a monthly ticket from R1 000 to R1 500 as from 1 July, is also out of reach for ordinary commuters. All these factors, together with the Western Cape High Court’s decision not to grant refunds for previously unlawfully imposed tariffs, will make Cape Town an extremely expensive, bordering on unaffordable, place to live.
Clearly, the City needs a great deal of money to fund its social welfare programmes and residents who faithfully pay their taxes are being mercilessly milked.
The City claims that infrastructure projects will continue, but without transparent and practical measures to protect households against escalating living costs, this budget runs the risk of financing political ambition at the expense of paying residents.
Cape Town deserves a budget that strikes a balance between essential services and the economic realities of its diverse communities. The City of Cape Town must be careful not to alienate its tax base with an unfair burden in an attempt to accommodate the province’s rapidly growing population, which is largely economically inactive.
Boasting about providing better service delivery than the ANC rings hollow if your residents are being impoverished in the process. It is, after all, not an achievement to be better than the ANC when it comes to local governance. Considering the rates that the City’s residents currently pay, they should surely receive service delivery of the highest possible standard — that is not the case, though.
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