Civic groups challenge Cape Town's proposed 10.2% property rate reduction

The City of Cape Town is proposing a 10.2% reduction in the property rates formula following the General Valuation 2025 (GV2025). However, civic groups are raising serious concerns, alleging that the City may be attempting to mislead the public with what they describe as “very fancy footwork.”

The City’s rate-in-rand refers to the formula used to calculate property rates, which it claims is the lowest in South Africa across all rate categories.

The City stated that this lower rate-in-rand is one of several measures proposed to minimise property rate increases for most homeowners, despite significant asset value growth for property owners in Cape Town.

“Cape Town’s vastly lower rate-in-rand shows that it generally costs less to own a property asset here than it does anywhere else. This asset can also be expected to grow in value over time, increasing the net worth of families and personal wealth of ratepayers across the income and property value spectrum,” Mayor Geordin Hill-Lewis said.

Other proposed measures in the forthcoming draft Budget 2026/27 include raising the ‘rates-free benefit’ to the first R500,000 of property value (up from R450,000), and extending this benefit to all properties up to R8m (up from R7m).

Hill-Lewis said that the proposed 10,2% rate-in-rand decrease and extended rates benefits “will shield the large majority of ratepayers”.

The City said it will further deliver a balanced budget while keeping tariff increases to the minimum level needed to avoid severe service delivery cuts. 

They said more details will follow when the 26/27 budget draft is tabled in City Council on 26 March and when the full public participation process commences. 

Property expert Storm MacLennan, from Jawitz Properties, has warned that the automated CAMA system consistently overvalues properties by failing to capture developments, positioning and access issues, along with other factors that affect real market prices.

Real-world data from GV2022 shows successful objections reduced homeowners' rates by 20-30% on average, translating to monthly savings between R800 and R1,050.

Advocate Rod Solomons from #SA1stForum stated that reducing the rate-in-rand while property values soar “seems benevolent, but we should not be grateful to a #tonedeafDA and its 'property-selling' mayor.” He remains uneasy, particularly with the ongoing rates challenge in court.

“My immediate and gut feeling is that ‘we are being hoodwinked again’. It does not make sense that if your property increases, then it follows that you will pay less rates and service fees,” Solomons said.

Stop CoCT’s Sandra Dickson said that some ratepayers have seen their new property valuation, and that fears over being unable to pay their municipal bill have started afresh.

“The mayor claims that 60% of ratepayers will not receive a rate increase, some rates will be lower, and others will remain unchanged. This means that 40% of ratepayers are hit hard with above the ‘average’ property value increase of 17.2%, the City reports for residential properties. 

“The City boasts with its new rate-in-rand of 0.006428; however, this factor does not include the Fixed Charges for electricity, water, sanitation and cleaning, which were stripped out of rates in the 2025/26 Budget,” Dickson said.

“It can be concluded that the City is doing very fancy footwork with its proposed measures.   However, it remains clear that the trend of the 2025/26 Budget is continued, where the R3 million and upper tier of properties contribute the bulk of the City's coffers.”

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