The Western Cape High Court has ruled that three fixed charges introduced by the City of Cape Town in its 2025/26 budget are unlawful, a significant victory for ratepayers and civil rights organisations who challenged the levies in court.

The charges at the centre of the dispute were a city-wide cleaning levy, a fixed water charge, and a fixed sewerage charge introduced by the City last year; and subsequently challenged in court by the South African Property Owners Association (Sapoa) and later AfriForum.

In a judgement handed down earlier today, a full bench of the High Court found that all three charges calculated using property value bands rather than being linked to actual service consumption, does not comply with the Constitution, national legislation or the City’s own tariff policies.

The court further held that the City had overstepped its legal authority in imposing the charges. All three charges have been set aside with effect from 30 June.

The City’s counter-applications were dismissed, and the applicants awarded legal costs.

READ ALSO: Property owners take City of Cape Town to Court over controversial tariffs

Ruling welcomed

AfriForum welcomed the ruling, calling it a landmark moment for communities across the country.

“AfriForum welcomes the court’s ruling regarding the City of Cape Town’s tariff structures. The judgment provides important clarity that tariffs must be structured in a fair, transparent and legally compliant manner, with a clear link to actual service consumption. The ruling is not only significant for Cape Town, but also serves as guidance for municipalities across the country,” said Jurie Ferreira of AfriForum.

“This victory confirms that when communities are organised, informed and determined, the rule of law prevails. AfriForum remains committed to constructive engagement and protecting the rights of communities,” he added.

Civic organisation Stop CoCT also welcomed the judgment, saying it is long-overdue relief for ratepayers who have been buckling under increased municipal bills for more than a year.

“The City refused to listen to anyone and it was left to the court to halt their terror tariff reign in Cape Town,” said founder of Stop CoCT Sandra Dickson, also a PR councillor for the Good Party.

“Cape Town Mayor Hill-Lewis has now been reined in on his overambitious plans for the City, which saw the City’s capital plan double in four years, leaving residents to foot the bill. The far-above-inflation tariff increases and the continuous addition of new revenue streams have now been halted and residents can breathe a sigh of relief,” she said.

VF Plus councillor Pieter Jansen van Vuuren said the party strongly objected to the tariff structure from the outset, warning that linking fixed tariffs to property values is unfair and unconstitutional.

“Tariffs must be based on actual consumption and services rendered, not on the market value of a property. This system was in reality a disguised additional property tax and particularly punished middle-class and working residents who are already bearing a heavy burden under rising costs,” he said.”The court ruling is proof that the DA in Cape Town has not struck the right balance between revenue generation and fairness towards ratepayers. The VF Plus calls on the City to fully comply with the court’s ruling and to introduce a fair, legally correct tariff structure in the next budget that respects the principle of consumption and service delivery.”

City mulls appeal

In a statement issued following the ruling, the City said it is weighing up its options to appeal the judgment. The City confirmed it will analyse the ruling and model its potential impact on ratepayers, particularly lower- and middle-income households, before deciding on its next legal steps. Crucially, should the City proceed with an appeal, the order will be suspended in the interim, the City noted.

Mayor Geordin Hill-Lewis said: “It remains my firm belief that Cape Town cannot truly work unless it works for everyone. Every resident from every community depends on a future where everyone has access to basic services and infrastructure that creates opportunity for jobs and growth. Cross-subsidising — where the better off among us help to fund services for the less fortunate — is the most equitable and sustainable way to ensure a working city of hope for all.”

The only other option would be to cut our infrastructure budget. This would lead to a less functional city with less basic dignity for residents — a terrible and indefensible outcome.

“The point of using property values to determine fixed charges is to protect lower- and middle-income homes. The only alternative is for everyone to pay a flat charge regardless of whether they are low-income or affluent. The implication of today’s ruling might be that fixed charges go up for many families and go down for more affluent families. That is the perverse implication of this ruling, and why we will have to carefully consider how best to protect middle- and lower-income families going forward,” he said.

“The only other option would be to cut our infrastructure budget. This would lead to a less functional city with less basic dignity for residents — a terrible and indefensible outcome. We do not agree with this course of action at all. Investing in infrastructure is the core of what makes a city work for all and drives a growing economy. The City will carefully model the potential impact of this ruling on lower- and middle-income households — who we will keep striving to protect.”

“The implication of the ruling, if not appealed, is that city-wide cleaning charges would be moved back into the property rates account rather than being charged as a tariff, which would entail an increase to the proposed rate-in-rand. As it stands, the City has tabled a 10,2% reduction in the rate-in-rand in the draft 2026/27 budget,” the City stated.

“Importantly, the city-wide cleaning charge does not raise new revenue and the service still requires funding, notwithstanding the ruling on how it is charged. Residents have always contributed to this service, inter alia, via electricity purchases. From 2025/26, city-wide cleaning was simply removed from electricity charges, lowering prices, and displayed separately on the monthly bill. In this way, waste management became a self-funding service with ring-fenced revenue.”