Cape Town: The City will publish amendments to its tabled Budget 2026-27 for public comment following the Western Cape High Court’s ruling on tariff structures. The main impact of the judgment is to limit the ability of the City of Cape Town and all municipalities to cross-subsidise to protect lower and middle income households.
The amendments represent the proposed efforts by the City to continue offering this protection within the framework of the ruling. Proposed amendments to be published for comment in a supplementary public participation process from May 27 to June 10, 2026.
Mayor Geordin Hill-Lewis stated that a key impact of this court ruling is what they have warned all along: that water and sanitation fixed charges will go up for many families in lower and middle-value residential properties and go down for higher-value properties.
They have done the utmost to mitigate this effect. To protect lower and middle income households from the impact of this court ruling. They propose a further raising of the rates-free rebate to the first R620,000 of property value, up from R450,000, for residential properties under R8m. All indigent benefits will also apply up to R620,000 residential property value.
This will reduce property rates for many households in the lower and middle-value bands to mitigate the rise in fixed water and sanitation charges they will face because of the court ruling. While they adjust for the impact of this ruling, we remain concerned about its implications for the ability of municipalities to equitably cross-subsidise in utility tariffs in the South African social context.
According to Mayor Lewis they will engage the National Treasury and Co-operative Governance Departments nationally to seek regulatory clarity on available options for municipalities to equitably cross-subsidise lower and middle-income households.
He stated that it remains his firm belief that Cape Town cannot truly work unless it works for everyone. For this reason, they do not propose any cuts to Cape Town’s essential infrastructure projects, like pipe replacements, better sanitation and public transport.
To cut these projects, as has been suggested by some, would lead to a less functional city and less basic dignity for residents. It would be a terrible and indefensible action. These are precisely the investments that make Cape Town the most functional city in the country.