The Western Cape High Court has reserved judgement in a landmark legal challenge that could transform municipal financing nationwide.
The South African Property Owners Association (SAPOA) and Afriforum squared off against the City of Cape Town over three days last week in a hearing centred on whether municipalities have the constitutional authority to impose fixed charges based on property values—a practice SAPOA argues amounts to an unconstitutional “blank cheque” for local government spending.
The matter was heard by a full bench of three senior judges—Judge President Nolwazi Mabindla-Boqwana, as well as presiding judges Judge Andre le Grange and Katharine Savage.
High stakes
The legal clash centres on SAPOA and AfriForum’s bid to have three contentious budget tariffs covering cleaning, fixed water charges, and fixed sanitation—as introduced by the City’s 2025/26 Budget— struck down as unconstitutional. While the City insists these are legitimate service charges rather than rates, it has raised the stakes considerably with a bold counter-application. Should the court rule against the municipality, Cape Town wants Section 75A of the Systems Act itself declared invalid, arguing that such a decision would cripple its constitutional mandate to deliver municipal services.
“In essence, SAPOA argued that the City does not have the power, in terms of the Constitution and the applicable legislation, to raise fixed charges based on property value bands,” comments SAPOA CEO, Neil Gopal.
Municipalities across the country, including the City of Cape Town and others that regularly receive clean audits, must also be held accountable on the way taxpayers’ money is spent
The Good Party, who sought leave to intervene, the Cape Town Collective Ratepayers’ Association, and SA First Forum, both of whom were admitted as friends of the court, all support SAPOA’s views.
According to Gopal, the Court specifically asked the City of Cape Town’s counsel whether there is any legislative requirement that the City, or any other municipality for that matter, is required to “tighten its belt”.
Complex matter
“SAPOA and its members have no objection to the principle of subsidisation, or to pay its fair share of municipal service costs. The problem arises, however, if a municipality is given unbridled power and a blank cheque to do as it pleases. Municipalities across the country, including the City of Cape Town and others that regularly receive clean audits, must also be held accountable on the way taxpayers’ money is spent,” says Gopal.
“The Court reserved judgment, but no indication has been given as to when it may be expected. The Court did point out, however, that this is a complex matter, that requires careful adjudication, and that it is mindful of the effect that this judgment may have on other municipalities throughout the country.”
