{"id":867348,"date":"2026-07-24T12:30:00","date_gmt":"2026-07-24T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=867348"},"modified":"2026-07-24T11:55:10","modified_gmt":"2026-07-24T09:55:10","slug":"cape-towns-unlawful-rubbish-and-water-charges-on-homeowners","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/867348\/cape-towns-unlawful-rubbish-and-water-charges-on-homeowners\/","title":{"rendered":"Cape Town’s unlawful rubbish and water charges on homeowners"},"content":{"rendered":"\n

The City of Cape Town will have to overhaul the way it charges homeowners for certain municipal services.<\/p>\n\n\n\n

This comes after the Western Cape High Court ruled that several property value-linked levies are unlawful.<\/p>\n\n\n\n

According to law firm Wright Rose-Innes, the dispute began after the city introduced three new charges on residential rates bills from 1 July 2025. These included a city-wide cleaning charge, a fixed water charge, and a fixed sewerage charge.<\/p>\n\n\n\n

The charges were challenged by the South African Property Owners’ Association (Sapoa) and AfriForum, which argued that they were inconsistent with the Constitution and national legislation.<\/p>\n\n\n\n

The parties also argued that it was against the city’s own by-laws because they were calculated on the basis of property value rather than actual service usage.<\/p>\n\n\n\n

Wright Rose-Innes explained that the roots of the issue date back to the Western Cape’s severe drought in 2018<\/p>\n\n\n\n

 During the water crisis, residents responded to the city’s calls to conserve water by significantly reducing consumption through measures such as rainwater harvesting, boreholes, and greywater recycling.<\/p>\n\n\n\n

While these conservation efforts were environmentally responsible, they also reduced the city’s revenue.<\/p>\n\n\n\n

Because sewerage tariffs are linked to water consumption, lower water usage meant the municipality collected less income, even though households continued to rely on the sewerage network.<\/p>\n\n\n\n

To address this shortfall, the city introduced the three fixed charges. However, the law firm noted that the problem was not the introduction of additional charges themselves, but how they were calculated.<\/p>\n\n\n\n

Municipalities are legally allowed to generate revenue through property rates, service charges, surcharges on service fees, or other taxes authorised by legislation.<\/p>\n\n\n\n

Property rates are based on a property’s market value and require formal public participation before implementation, while service tariffs must be reasonably proportional to the services actually used.<\/p>\n\n\n\n

“The three charges introduced by the City did not fit neatly into either category,” Wright Rose-Innes said. <\/p>\n\n\n\n

“By basing the charges on property value while simultaneously levying VAT, the City blurred the line between property rates and service tariffs.”<\/p>\n\n\n\n

The High Court agreed <\/h2>\n\n\n
\n
\"\"<\/a>
Mayor Geordin Hill-Lewis<\/em><\/figcaption><\/figure><\/div>\n\n\n

The High Court agreed, declaring the charges unlawful and invalid. However, the court suspended the declaration of invalidity until 30 June 2026, meaning the ruling only applies prospectively.<\/p>\n\n\n\n

Charges already billed and collected before that date remain valid and payable, and homeowners are not entitled to refunds.<\/p>\n\n\n\n

The law firm said the judgment sends an important message to municipalities across South Africa.<\/p>\n\n\n\n

“This judgment serves as a clear reminder that municipalities, regardless of their intentions or financial pressures, must operate strictly within the bounds of the Constitution and applicable legislation,” it said.<\/p>\n\n\n\n

“Good intentions and fiscal challenges do not justify departures from established legal frameworks,” the firm said. <\/p>\n\n\n\n

It added that residents have the right to be charged for services in a manner that is fair and proportionate to their actual usage, rather than based on the market value of their property.<\/p>\n\n\n\n

Following the judgment, the City of Cape Town said it would comply with the court’s decision and revise its 2026\/27 draft budget.<\/p>\n\n\n\n

Sapoa CEO Neil Gopal welcomed the move. \u201cWe are glad to see that the city has decided to abide by the court’s decision, and that it has decided not to waste further taxpayers’ funds in pursuing fruitless appeals.”<\/p>\n\n\n\n

However, Mayor Geordin Hill-Lewis argued that the ruling limits municipalities’ ability to use utility charges to cross-subsidise poorer households.<\/p>\n\n\n\n

To soften the impact, the City has proposed increasing the rates-free rebate from the first R450,000 of a property’s value to R620,000 for residential properties valued below R8 million.<\/p>\n\n\n\n

The city will also remove the standalone city-wide cleaning charge by incorporating those costs into property rates, while fixed water and sanitation charges will once again be based on water meter connection size rather than property values.<\/p>\n\n\n\n

Hill-Lewis stressed that the judgment does not require refunds for charges collected during the current financial year, as the court’s order only takes effect from 1 July 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"

The City of Cape Town will have to overhaul the way it charges homeowners for certain municipal services.<\/p>\n","protected":false},"author":92,"featured_media":855623,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2080601643150651784","_sma_x_attempts":1,"footnotes":""},"categories":[23],"tags":[2279,853,8644],"class_list":["post-867348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-cape-town","tag-south-africa","tag-western-cape-high-court"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867348","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=867348"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867348\/revisions"}],"predecessor-version":[{"id":867370,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867348\/revisions\/867370"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/855623"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=867348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=867348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=867348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}