Cape Town’s Property-Fixed Charges Declared Invalid and Unlawful by High Court
The Western Cape High Court has handed ratepayers a significant victory, declaring three charges introduced by the City of Cape Town in its 2025/2026 budget unlawful and invalid.
The charges — a city-wide cleaning charge, a fixed water charge, and a fixed sewerage charge — were all calculated according to property value bands rather than actual consumption or use and/or the costs associated with rendering the service.
SAPOA and AfriForum brought separate applications challenging the charges, with the Good Party granted leave to intervene in support of ratepayers.
The Court found the charges unlawful on several grounds. Most fundamentally, municipalities charging fees for services must comply with section 74 of the Municipal Systems Act (Act 32 of 2000), which requires tariff policies to reflect the principle that users generally pay in proportion to their use of a service. Fixed charges pegged to property value bands — with no link to how much water a household actually uses, or how much waste it generates — fail this test entirely.
The Court also rejected the City’s attempt to have sections of the Municipal Systems Act and Water Services Act declared unconstitutional in conditional counter-applications. The Court found that existing legislation does not prevent the City from fulfilling its service delivery obligations — it simply requires it to do so lawfully.
The charges were set aside with effect from 30 June 2026, giving the City time to find compliant funding alternatives, whether through adjusted consumption-based tariffs or increased property rates.
What is the implication of setting aside the charges from 30 June 2026?
The City continues to lawfully collect the three charges up to and including 30 June 2026, which coincides with the end of the 2025/2026 financial year. This gives the City the opportunity to restructure its funding approach in the 2026/2027 budget without causing disruption during the financial year.
By setting aside the charges prospectively from 30 June 2026 rather than from their introduction on 1 July 2025, the Court effectively validated all charges already collected. Ratepayers who paid the unlawful charges throughout the 2025/2026 financial year will therefore not be entitled to refunds.
The City accepted the judgment. As a result, the draft budget had to be adjusted to align with the Court’s ruling.
The amendments included:
- City-wide cleaning to be funded through property rates;
- An increase in property rates for commercial properties to fund the phasing out of electricity’s contribution to property rates;
- Fixed water and sanitation charges to be based on water meter size rather than property value;
- Increased consumption-based water and sanitation charges for high-usage domestic users;
- An increase in the residential deduction from R500 000 to R620 000 (including the statutory exclusion of R15 000) to mitigate the impact of higher fixed charges on lower-value residential properties; and
- Property rates tariffs had to be increased to fill the resulting funding gaps.
The impact of the new values and tariffs will be property-specific. There is a rates and tariff calculator available on the City’s website (https://www.capetown.gov.za/Family%20and%20home/Residential-property-and-houses/Private-properties/rates-and-tariffs-calculator), which enables ratepayers to determine their current and future monthly costs.
Judgement: SAPOA and AfriForum v City of Cape Town, Western Cape High Court, delivered 30 April 2026.
Further Reading: Full judgement available online.