City of Cape Town’s “Lower Rates Claim” Does Not Hold Up

GOOD Statement by Sandra Dickson, GOOD City of Cape Town Councillor:

The DA-led City of Cape Town has repeatedly communicated that “lower rates are coming” because of the 2026/27 Draft Budget. This claim is based on the 10.2% reduction in the rate-in-the-rand. However, when placed in the full context of the 2026/27 draft budget and the new GV2025 property valuations, this claim becomes misleading in its practical effect on residents.

Property rates are not determined by the Rate-in- Rand alone. It is the product of two factors: the Rate-in-Rand applied and the underlying property valuation. While the City has emphasised the reduction in the rate-in Rand factor, it has not given equal weight to the fact that property valuations are increasing by approximately 17.2% on average. The interaction between these two figures ultimately determines what residents will pay on their Municipal bills from 1 July 2026 onwards.

This is where the City’s messaging falls short.

There is a clear and unavoidable mathematical reality: if a property’s value increases by more than roughly 11%, the reduction in the rate-in-the-rand is not enough to offset that increase. In those cases, the homeowner will pay more in property rates, not less. Given that the average valuation increase exceeds the 11% threshold, more households will experience higher bills despite the City’s headline claim that 60% of households will see a decrease or no change in their bills.

This disconnect is further reinforced by the City’s own online calculator, which many residents rely on to estimate their future bills. The calculator prominently reflects the reduction in the rate-in-the-rand but does NOT clearly demonstrate the full effect of increased property valuations. As a result, it can give the impression that rates are decreasing, when in fact the combined impact of valuation increases and the adjusted rate points in the opposite direction for more than 60% of households.

The issue here is not whether the rate-in-the-rand has been reduced. The issue is the overall impression created by presenting that reduction in isolation. By framing the change as “lower rates,” without adequately explaining the impact of higher valuations, the City risks misleading residents about the real financial consequences they will face from 1 July 2026.

Following a complaint to the Advertising Regulatory Board, the City has now removed its “lower rates” messaging. However, it has not issued a public clarification to explain the full picture to residents. Removing the claim does not correct the understanding that has already been created.

In the end, the numbers are straightforward. A reduced rate applied to a significantly higher property value does not automatically translate into savings. For many homeowners, particularly those whose property values have increased above the ±11% threshold, the reality is clear: their rates are going up.

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