The Western Cape High Court has dealt a major financial blow to the City of Cape Town, ruling that controversial property-value-based tariffs introduced in the city’s 2025 budget are unlawful.
In a judgment that will likely leave many ratepayers breathing easier – and city accountants reaching for strong coffee – the court declared the city-wide cleaning tariff, fixed water tariff and fixed sanitation tariff invalid.
The ruling gives the city until 30 June 2026 to remove the charges.
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Levies calculated according to property values
The case followed an extended legal battle involving the South African Property Owners Association, the Cape Town Collective Ratepayers’ Association, AfriForum and the City of Cape Town.
At the heart of the dispute were levies calculated according to property values rather than actual municipal service consumption – a model critics argued effectively forced residents to pay more without receiving additional services.
The city’s cleaning tariff, intended to fund public space maintenance, was particularly contentious because it was unrelated to household usage, while fixed water and sanitation tariffs added further charges regardless of actual consumption.
Opponents argued this amounted to residents being billed based on the value of their homes rather than the amount of water used or waste produced – a concept many saw as paying champagne prices for tap water.
High Court disagreed
The City defended the tariff structure, arguing 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.
According to Jurie Ferreira, AfriForum Regional Head for the Southern Region, 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.
While the court acknowledged Cape Town’s infrastructure obligations, it stressed that financial innovation cannot come at the expense of legality.
For now, ratepayers have secured a significant victory, while the city has been reminded that balancing the books cannot involve trimming legal corners – even in a budget haircut.
Click HERE to read the full ruling.
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 order will however, be suspended should the City appeal.
“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.”
Crucially, the City of Cape Town indicated that should it 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.
