The City of Cape Town has adopted its R87.79 billion budget for the 2026/27 financial year, a record-breaking allocation that includes a R40 billion three-year infrastructure plan and R6.8 billion for safety and security. Following a Western Cape High Court ruling that invalidated using property values for fixed water and sanitation charges, the revised budget shifts these costs back to water meter size, which the City warns may increase bills for homes valued below R2.8 million.
To mitigate impacts on lower- and middle-income households, the City implemented expanded relief measures, including increasing the rates-free threshold from R450,000 to R620,000 and raising the pensioner income rebate limit to R27,000 per month. Critics argue the budget maintains a “subscription model” for basic rights, citing a 68.3% increase in the electricity fixed charge to R424.30 per month and concerns over persistent spatial inequality, while the City claims 97% of ratepayers will see increases under 20%.
Key Budget Features
- Total Allocation: R87.79 billion for 2026/27, with R14.3 billion in capital expenditure for the year.
- Rates Relief: Residential rate-in-the-rand formula dropped by 10.2%, but increased property valuations still project a 7% rise in total rates revenue.
- Water & Sanitation: Fixed charges now based on meter size rather than property value; desalination plant costs are absorbed into water tariffs.
- Electricity: City restricted the national Eskom hike to an average 6.67% increase, but added unregulated components for street lighting and cleaning.
- Timeline: The budget was adopted after public consultation closed in June 2026, with the financial year beginning 1 July 2026.