Cape Town declines to appeal tariff ruling

Cape Town said on Friday it will not appeal a Western Cape High Court ruling that found parts of its municipal tariff structure unlawful, opting instead to reopen its draft 2026/27 budget for public comment and seek other options with national government. Mayor Geordin Hill-Lewis said the city would amend the budget after the court struck down fixed cleaning, water and sanitation charges linked to property values. The decision leaves the city revising how it funds some services ahead of the new municipal financial year starting July 1. It also keeps in place a court-ordered deadline of June 30 for the unlawful charges to fall away. ### Which charges did the court rule unlawful? The Western Cape High Court ruled on April 30 that Cape Town’s property-value-based fixed charges for cleaning, water and sanitation were unlawful and invalid. The court said those charges were inconsistent with the Constitution, national legislation and the city’s own Tariff By-law, according to reports on the judgment. The order set the charges aside from June 30, 2026, rather than immediately. (ewn.co.za) The case was brought by the South African Property Owners’ Association, or Sapoa, and AfriForum, with the Cape Town Collective Ratepayers’ Association, South Africa First Forum and the GOOD party also participating in the litigation. News24 reported the court found the fixed charges effectively amounted to an additional property rate that was inconsistent with municipal legislation. (moneyweb.co.za) ### Why did Cape Town drop an appeal? Mayor Geordin Hill-Lewis said the city chose not to appeal and would instead approach national government and National Treasury on how to preserve cross-subsidisation. “We think that we could have a more fruitful discussion if we took up the issue of how to properly cross subsidise infrastructure investment with the treasury,” Hill-Lewis told EWN. (news24.com) Hill-Lewis said the city’s concern was how to keep “some built in element of cross subsidisation in the tariffs” to fund infrastructure. Earlier reporting had said an appeal would have suspended the order pending the appeal outcome, but the city has now decided against that route. ### What changes is the city now proposing in the budget? (ewn.co.za) Cape Town said it will open a supplementary public participation process on amendments to the proposed 2026/27 budget. News24 reported the comment period will run from May 27 to June 10. Property Wheel reported the city plans to move city-wide cleaning costs back into property rates and revert fixed water and sanitation charges to water-meter connection size rather than property value. (ewn.co.za) The same report said the city is proposing to raise the rates-free rebate threshold further, while Hill-Lewis said the aim is to cushion lower- and middle-income households from higher fixed water and sanitation charges. (news24.com) ### Who is expected to pay more or less under the revised plan? Hill-Lewis said lower- and middle-income households could now face higher fixed water and sanitation charges, while costs for higher-value properties would be reduced. He repeated that point in comments reported by EWN and News24 after the city announced it would amend the budget. (propertywheel.co.za) News24 reported the city is proposing to increase the rates-free rebate threshold from R450,000 to R620,000 for residential properties valued below R8 million, with indigent benefits also applying up to the new threshold. The city said that step is intended to offset some of the increases those households may face after the ruling. (ewn.co.za) ### What happens next before July 1? May 27 is the date Cape Town says it will publish the amended budget proposals for a new round of public comment, with submissions due by June 10. The court’s order takes effect on June 30, and the city’s 2026/27 financial year begins on July 1. (news24.com) Sapoa chief executive Neil Gopal said after the April 30 ruling that the group wanted “constructive consultation with the city” on a lawful 2026/27 budget. The next formal step is the city’s revised budget process, which will determine how cleaning, water and sanitation charges are structured for the year ahead. (moneyweb.co.za) (news24.com)