Public comments for the draft budget are invited until April 30, 2026
Image: Henk Kruger / Independent Newspapers
The City of Cape Town’s draft 2026/27 budget has come under renewed scrutiny from ratepayer groups and political stakeholders, with critics warning that households could face municipal bill increases well above inflation over the next three years once property valuations and service charges are fully accounted for.
The debate follows the release of the City’s draft budget shortly after the 2025 general valuation roll, which will take effect from 1 July 2026. The City has stated that around 60% of homes will see either a decrease or no change in property rates, citing a 10.2% reduction in the rates-in-the-rand and an expanded rates-free threshold.
However, despite these measures, total revenue from property rates is still expected to increase by around 7%, generating an additional R963.5 million for the City.
Cape Town Collective Ratepayers’ Association (CTCRA) also argued that this presentation does not reflect the real impact on household bills once valuation increases and other municipal charges are included.
CTCRA chairperson Bas Zuidberg said the headline messaging around 'relief' does not match what many residents will experience in practice.
“While there is a reduction in the rate-in-the-rand, it does not compensate for the sharp increases in property valuations and the cumulative impact of other charges,” Zuidberg said.
“For many households, the result is that municipal bills will still rise significantly above inflation.”
The organisation notes that average freehold property valuations have increased by approximately 26% across Cape Town, with around 440,000 properties roughly 69% seeing increases above 11.3%. CTCRA argues that once valuation growth exceeds this threshold, the reduction in the rates-in-the-rand is effectively neutralised, resulting in higher overall bills for many households.
According to CTCRA, modelling based on its online calculator shows that municipal bills will increase at multiples of the current inflation rate of 3.0% (CPI February 2026) across a range of scenarios. The organisation further warns that planned increases in the City’s revenue contribution from ratepayers projected to rise from 68% to 72% of the operating budget by 2028/29 will place additional pressure on households.
Zuidberg added that higher-value properties are likely to bear the brunt of these increases. “Properties above R4 million are particularly exposed to annual increases that could exceed 10% in real terms,” he said.
The City has also projected additional ratepayer-funded revenue growth of 9–10% in the outer years of the budget cycle, which CTCRA saif will compound affordability pressures, particularly when combined with limited growth in the number of ratepaying properties.
Beyond valuation concerns, CTCRA has also raised structural issues in the budget, including the growing reliance on property rates, rising fixed charges for water and sanitation, and the introduction of a city-wide cleaning levy linked to property values.
The organisation argues that these mechanisms amplify the impact of valuation increases, particularly for higher-value properties, and have contributed to what it describes as sustained above-inflation municipal cost escalation.
While the City maintains that its budget balances affordability with infrastructure and service delivery needs, political and civil society scrutiny has intensified around how the budget is communicated to residents.
Further criticism has emerged over the City’s communication strategy. The GOOD Party’s Sandra Dickson, who previously served as chairperson of the STOP COCT organisation, has raised concerns that the City’s public messaging around “lower rates” does not reflect the full impact of the budget.
GOOD Party representative Sandra Dickson said the claim that “lower rates are coming” is based narrowly on the reduction in the rates-in-the-rand, without adequately accounting for rising property valuations.
“The City has repeatedly communicated that lower rates are coming based on a reduction in the rates-in-the-rand,” Dickson said. “But when you consider the full picture, including the new property valuations, that message becomes misleading in its practical effect.”
She explained that property rates are determined by both the rate-in-the-rand and the value of the property itself, meaning the two factors must be assessed together.
“In reality, a reduced rate applied to a significantly higher property value does not automatically mean savings,” she said. “For many households, especially where valuations have increased by more than about 11%, rates will still go up.”
Dickson also pointed to what she described as a gap in the City’s public-facing tools, including its online budget calculator, which she said does not clearly reflect the combined effect of valuation increases and rate adjustments.
“The calculator highlights the reduced rate but does not make the full impact of valuations clear enough,” she said. “This can create the impression that bills are going down when, for many households, they are actually going up.”
She further noted that following a complaint to the Advertising Regulatory Board, the City has since removed its “lower rates” messaging, but has not issued a public clarification to explain the full calculation to residents.
“Removing the message is not the same as correcting the understanding it created,” Dickson said.
Public submissions on the draft budget remain open until 30 April 2026.