Cape Town’s mayor, Geordin Hill-Lewis, has just announced some major tweaks to the city’s 2025/26 budget that are designed to ease the financial burden on middle-income households and pensioners.
This comes after the city received plenty of feedback from residents on the original budget plan released back in March.
The good news is the city isn’t cutting back on infrastructure investment either — they’re sticking with their record-breaking R40 billion plan to improve the city’s services and facilities.
Expanded Relief Measures After Listening to Residents
At a council meeting on May 28, Mayor Hill-Lewis shared some exciting updates.
The revised budget now includes more generous rates relief measures based on what locals told them.
Now, the city is inviting residents again to have their say during a second public comment period running from May 28 to June 13.
Hill-Lewis explained, “We really listened to Capetonians.
These new changes protect families living in more affordable homes while giving a much-needed break to the middle class with softer tariffs.”
What’s Changing for Property Owners
Here are some of the key highlights from the updated budget:
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The first R450,000 of your property’s value will now be rates-free if your home is worth up to R7 million (it was R5 million before).
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Pensioner income thresholds have been raised to R27,000 per household per month, no matter the property value — the broadest support criteria in the country.
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City-wide cleaning fees have been cut significantly for homes under R20 million, and pensioners now get a full 100% rebate on these charges.
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Fixed water charges are lower for homes valued between R1 million and R25 million.
Monthly Bills Should Feel Much Lighter
Thanks to these changes, the average increase in monthly bills will be much less than what was originally planned:
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Homes valued at R1.2 million could see bills up to 15% lower than first expected.
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R2 million homes might pay up to 24% less.
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For properties between R3 million and R4 million, bills could be as much as 33% lower.
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And for homes worth between R5 million and R7 million, the reduction could be up to 40%.
Electricity Prices Drop for Most Households
There’s also good news on the electricity front.
The city is removing the 10% cleaning cost from electricity tariffs, so prices will fall across the board.
In fact, households that use average or above-average amounts of electricity and water might even see their overall bills go down.
That said, some high-value homes that use very little utility power — often those with solar panels or boreholes — might still see increases over 20%.
But these homes can sell excess solar energy back to the city for credit or cash, which helps offset the cost.
Why Fixed Charges Are Still Important
Mayor Hill-Lewis was clear that fixed charges are necessary to keep the system fair and fund long-term projects.
“We can’t have a R50 million home paying the same fixed charge as a R500,000 home — that just isn’t fair,” he said.
The city is also moving away from the unpopular “pipe levy” and toward fixed charges based on property values.
Most homes under R2.5 million will pay less than under the old system.
Cape Town Keeps Its Huge R40 Billion Infrastructure Budget
Despite economic challenges, Cape Town is holding firm on its massive R40 billion infrastructure budget — the largest of any municipality in South Africa.
About 75% of this funding is targeted at helping lower-income communities.
Key projects include:
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Hiring over 700 new law enforcement officers
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Expanding the MyCiTi bus service to Khayelitsha and Mitchells Plain with R4.5 billion
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Investing R2 billion in water and sewer upgrades
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Spending R3.5 billion on road repairs
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Allocating R3.4 billion for informal settlement improvements
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Repairing streetlights with a R1 billion budget
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Upgrading rental units and public transport stations
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Enhancing informal trading infrastructure
Cape Town Offers Great Value Compared to Other Cities
Hill-Lewis also pointed out that even though property prices in Cape Town are generally higher, municipal bills here remain the lowest on average across South Africa’s big cities.
“People in Cape Town pay less and get better services.
Even after you factor in higher property values, Cape Town’s bills are still lower than Johannesburg’s in most cases.”