- Mayor Geordin Hill-Lewis has announced a South African-record infrastructure investment of R39,7bn over three years in an address to City Council on the tabling of the metro’s proposed ‘Invested in Hope’ Budget 2025/26 on 27 March – which includes R5-billion for electricity grid upgrades.
- Major tariff structure reforms will further bring notable relief for lower income households, with just a 2% electricity price increase compared to Eskom’s 11,32% nationwide increase to municipalities.
The City’s draft 2025/26 Budget brings important changes to the tariff structure to ensure that the City is able to perform its service delivery functions sustainably now and into the future with a rapidly growing Cape Town. Please comment on the Invested in Hope Budget before 2 May 2025. Visit www.capetown.gov.za for information on the public meetings and also to use the City’s innovative residential property calculator to estimate the potential changes on accounts from 1 July 2025.
‘The proposed tariff reforms will bring meaningful relief for lower-income households in particular while at the same time helping the City to invest in infrastructure and service delivery into the future to make Cape Town an even better place to live for everyone. The City is investing a South African-record R39,7bn in infrastructure over the next three years for better water and sanitation, roads, electricity services, public transport and more.
‘We encourage households and commercial customers to view the tariff reforms and rates as a whole. For instance, Eskom’s increase to municipalities is 11,32%, but City customers will see an increase of just 2% on average – unprecedented in South Africa. This is made possible by our comprehensive review of the electricity tariff structure.
‘For the past three decades, around 10% of the cost of each electricity unit you bought cross-subsidised, in other words, helped to fund, other City services, such as area cleaning. This system worked when electricity was much cheaper, but will be discontinued given that Eskom electricity now costs 400% more than it did in 2004.
‘There are also material changes in the tariffs for water and sanitation and urban waste management in the way that it is calculated and how it will be displayed on accounts, but not necessarily in the cost impact. Importantly, all income from rates and tariffs go toward paying for service delivery.
‘In general, it must be pointed out that the City of Cape Town offers the lowest property rates for Commercial, Industrial, and Residential properties, based on an analysis of the 2025/26 draft budgets tabled by each metro. The rate-in-the-rand is a statutory formula used by municipalities to calculate property rates. The formula shows how much a person would pay in rates for every rand of their property value.
‘Based on this formula, Cape Town offers the lowest property rates of all metros for both residents and businesses in 2025/26,’ said the City’s Mayoral Committee Member for Finance, Councillor Siseko Mbandezi.
For every R1 in property rates, Cape Town residents help to fund:
• Policing, Traffic, Fire and Disaster services (29 cents)
• Infrastructure investment (14 cents)
• Free and subsidised services to the poor (15 cents)
• Customer care, IT and service delivery (15 cents)
• Parks, public spaces, environment and libraries (13 cents)
• MyCiTi public transport (six cents)
• Economic growth, tourism and informal trading programmes (four cents)
• City clinics and health services (four cents)
Please visit www.capetown.gov.za draft budget trending box on the landing page for all budget-related information as well as a public engagement schedule, the latter being subject to updates and changes.
Submit comments on the draft Budget before 2 May 2025:
• Email: Budget.Comments@capetown.gov.za
• Online: www.capetown.gov.za/collaborate ; or www.capetown.gov.za/HaveYourSay
Author: Bryan Groenendaal
