Cape Town residents could soon face a new wave of financial pressure, as the City’s latest draft budget signals cost increases that may rise well above inflation, raising concerns about long-term affordability across the metro.
The City of Cape Town’s proposed 2026 to 2027 budget has come under scrutiny from ratepayer organisations, who warn that the full impact of the plan could be far more severe than initial figures suggest, according to reporting by IOL.
While the City maintains that around 60% of households will either see a decrease or no change in property rates, critics argue that this headline figure masks the broader reality. Once additional charges such as water, sanitation, refuse removal and city-wide cleaning are included, many residents are expected to face significantly higher overall municipal bills.
The Cape Town Collective Ratepayers’ Association (CTCRA) has been among the most vocal, cautioning that increases across multiple service categories could exceed the current inflation rate by a considerable margin. With the consumer price index sitting at around 3%, projections linked to the draft budget suggest that real household costs could climb far beyond that benchmark.
“This presents an incomplete picture of what residents will actually pay,” said Bas Zuidberg, chair of the CTCRA. “When you factor in all the associated charges, the increases are not only above inflation, they are materially higher for a large portion of households.”
A key driver behind the concern is the sharp rise in property valuations across Cape Town. Data linked to the latest valuation roll shows that freehold properties have increased in value by an average of 26%, with nearly 70% of properties seeing increases above 11%. While the City has reduced the rate-in-the-rand and expanded certain relief thresholds, ratepayer groups argue that these adjustments are unlikely to offset the effect of higher valuations.
For homeowners, particularly those with properties valued above R4 million, the financial impact could be significant. However, the knock-on effect is expected to extend well beyond property owners.
Economists and housing analysts warn that renters are unlikely to be shielded from the increases. As landlords absorb higher municipal costs, these are often passed on through rental adjustments, placing additional strain on tenants already grappling with rising fuel prices, food costs and broader inflationary pressures.
“This is not just a homeowner issue,” Zuidberg added. “It affects the entire housing ecosystem. If costs go up, those costs move through the system.”
The City’s growing reliance on ratepayer contributions is another point of concern. Current projections show that revenue from ratepayers is expected to increase from 68% to 72% of the City’s total budget over the next three years, placing a heavier burden on existing contributors.
At the same time, the overall operating budget is projected to grow by approximately 20%, driven largely by rising electricity costs, infrastructure investment and staffing expenses.
The CTCRA has also raised concerns about the structure of certain fixed charges, particularly those linked to property values. Critics argue that tying service charges such as water, sanitation and cleaning to property values disproportionately affects higher-value properties, regardless of actual usage.
Additional pressure points include the cost of advanced metering infrastructure and uncertainty around long-term policies such as electricity feed-in tariffs for households with solar installations.
Despite these concerns, the City has defended its approach, pointing to ongoing investment in infrastructure, efforts to reduce reliance on Eskom and initiatives aimed at improving long-term service delivery.
However, with projections indicating further increases of between 9% and 10% annually over the next two financial years, questions are being raised about whether the current model is sustainable for residents.
Ratepayer organisations are now urging Capetonians to actively engage in the public participation process, review the draft budget in detail and submit comments before the end-of-April deadline.
For many households, the concern is no longer just about rising costs, but about long-term affordability and whether the city’s current trajectory risks pricing residents out of their own communities.
Source: IOL – Erin Carelse
