Showdown over Cape Town’s new fees and taxes
The City of Cape Town has defended its new rates and taxes in an answering affidavit to legal action against the charges, with the court showdown coming in September.
The storm is brewing over three new tariffs introduced in the CoCT’s 2025 budget, specifically the city-wide cleaning tariff, fixed water tariff, and fixed sanitation tariff.
The cleaning tariff is aimed at maintaining the cleanliness of public spaces in the city.
It is not linked to any municipal services consumed at the property but is rather calculated based on the municipal valuation of the property.
The fixed water and sanitation tariffs are new fixed fees that are charged on bills regardless of the levels of consumption on properties.
These are similar to various capacity charges and fixed fees charged for electricity, which have also drawn the ire of residents in many other cities, except the CoCT’s fixed fees differ, again, based on a property’s value.
While residents are being charged new levies, they are not getting any additional services, which has drawn fiery opposition.
The South African Property Owners Association (SAPOA) launched a High Court application in July seeking to have these levies removed.
The Cape Town Collective Ratepayers’ Association (CTCRA)—representing 40 rate payers associations in the city—has now applied to join proceedings as a friend of the court.
Both groups have come out strongly against the taxes, arguing that there is no legislative basis for them to exist, especially the city-wide cleaning levy
In its submissions to the court, SAPOA argued that the tax is not tied to any service rendered to properties but is rather a revenue-generating tool to pay for the general cost of running a city, like road maintenance, emergency services and dozens of other expenses.
The crux of SAPOA’s argument is that, because the new tariffs are based on property values rather than consumption of the services, this violates Section 229 of the Constitution.
Section 229 states that a municipality can only charge rates on property, consumption-based charges for services such as water and electricity, surcharges on these service charges, or taxes allowed by other legislation.
There is no other legislation allowing for property taxes to be charged by a municipality, it said.
Battle lines drawn
The CTCRA said it supports the arguments made by SAPOA, presenting further the adverse effects that linking fixed charges to property values will have on the disposable income of the middle class.
“Contrary to commercial ratepayers, residential ratepayers have no options to offset their increased rates bill through increased rent, product and/or service pricing,” it said.
“The effect on residential ratepayers is therefore possibly more onerous than on commercial ratepayers. CoCT should be able to levy similar amounts through alternative mechanisms that do not rely on property values.”
The association has also warned that, if left unchallenged, more of these types of levies will be implemented across the country, with municipalities using Cape Town’s model as a basis.
Meanwhile, the city has countered the arguments, saying that opponents are presenting a selective reading of the country’s laws.
It said that the Constitution mandates municipalities to ensure the provision of services and does not prescribe methods of doing so.
It added that removing the fees would result in the city having an unfunded budget, which goes against the Municipal Finance Management Act, leaving it with a R2 billion shortfall.
The City of Cape Town has presented the levies in the budget as wealthy residents paying their fair share for the “pro-poor” budget, subsidising more vulnerable households.
It is also to fund the necessary infrastructure and development projects for the benefit of all.
It has repeatedly been claimed that the legal action is a result of ‘rich’ players lashing out and trying to protect their wealth at the expense of the poor.
However, the CTCRA has rejected this characterisation, saying that thousands of residents across the income spectrum have objected to the fees and the budget.
The court case is planned for 18 and 19 September 2025.
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