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 that tariff policies reflect the principle that users pay generally 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 Systems Act and Water Services Act declared unconstitutional in conditional counter-applications, finding that existing legislation does not prevent the City from fulfilling its service delivery obligations — it simply requires it to do so lawfully.
The charges are 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 in the judgment?
The City continues to lawfully collect the three charges right up until 30 June 2026, which conveniently 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 mid-year disruption.
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 year will not be entitled to refunds.
What is the impact of the judgment on the 2026/27 Draft Budget
The City had to amend the draft budget to align it with the judgment.
A supplementary public participation opportunity is now open for comments on the amendments. The closing date is 10 June 2026.
Read all about it here.
Judgment: SAPOA and AfriForum v City of Cape Town, Western Cape High Court, delivered 30 April 2026. Click below to read the judgment.