Cape Town property owners score big, but what’s the catch?

Western Cape High Court Deals Financial Blow to City of Cape Town

The Western Cape High Court has ruled that the City of Cape Town’s controversial property-value-based tariffs, introduced in the 2025 budget, are unlawful. This judgment is likely to bring relief to many ratepayers, while city accountants may be in for a long night.

The court declared the city-wide cleaning tariff, fixed water tariff, and fixed sanitation tariff invalid. The City of Cape Town has been given until 30 June 2026 to remove these charges.

Tariffs Calculated Based on Property Values

The case involved a lengthy legal battle between the South African Property Owners Association, the Cape Town Collective Ratepayers’ Association, AfriForum, and the City of Cape Town. At the centre of the dispute were levies calculated according to property values, rather than actual municipal service consumption. Critics argued that this model forced residents to pay more without receiving additional services.

The city’s cleaning tariff, intended to fund public space maintenance, was particularly contentious, as it was unrelated to household usage. The fixed water and sanitation tariffs added further charges, regardless of actual consumption. Opponents argued that residents were being billed based on the value of their homes, rather than the amount of water used or waste produced.

High Court Ruling

The City of Cape Town defended the tariff structure, arguing that it was lawful, rational, and necessary to secure stable revenue for infrastructure development and service delivery. However, the High Court disagreed, finding that municipalities may only levy service charges within powers granted by the Constitution and relevant legislation.

According to the judgment, municipal charges must be linked to lawful service provision and cannot simply be imposed because they may be financially convenient. AfriForum welcomed the decision, saying it reinforced the principle that residents should pay for services in proportion to actual use.

Jurie Ferreira, AfriForum Regional Head for the Southern Region, said the ruling confirms that tariff structures must be transparent, rational, and legally justifiable. “Any attempt by municipalities to generate revenue through arbitrary or indirect measures falls squarely outside the framework of the law – and the court has now reaffirmed this position,” Ferreira explains.

City of Cape Town Considering an Appeal

The City of Cape Town was quick to issue a statement, indicating that it was considering an appeal. “The City of Cape Town will analyse the judgment and consider its options for appeal following the Western Cape High Court’s ruling that certain fixed charges should not be linked to property value for the coming new financial year starting on 1 July 2026,” the city said.

The order will be suspended if the City appeals. In considering its legal options, the City will also model the ruling’s potential impact on ratepayers, especially lower and middle-income households. The ruling does not change the current 2025/26 tariff structure and budget, which remain lawful and applicable until 30 June 2026.

The City of Cape Town indicated that if it does not appeal, the city-wide cleaning charges will be moved back into the property rates account, rather than being charged as a tariff, which would entail an increase to the proposed rate-in-rand. As it stands, the City has tabled a 10.2% reduction in the rate-in-rand in the draft 2026/27 budget.

Read the full ruling here.