Cape Town's 2025/26 Budget: What Property Owners Need to Know

The City of Cape Town's final 2025/26 municipal budget brings meaningful relief for many property owners, without compromising on essential services or long-term infrastructure investment. Here is what has changed and why it matters.

Expanded Rates Relief: Protection Up to R7 Million

Homes valued up to R7 million now benefit from the first R450 000 of their property value being rates-free. Previously, this threshold was capped at R5 million. This change offers welcome relief to a wider segment of the market, particularly middle- and upper-middle income homeowners.

Infrastructure Investment Remains a Priority

The City has committed approximately R39.7 billion to infrastructure development over the next three years. This includes:

• Water and sanitation upgrades
   
• Road network improvements
   
• Expansion of the electricity grid
   
• Development of public amenities

More than 75 percent of this investment is directed toward lower-income households. The City will replace 100 kilometres of sewer pipes and 50 kilometres of water mains each year, supported by a dedicated R2 billion programme.

Tariff Reforms to Drive Fairness

New fixed charges for water and sanitation are now based on property value instead of pipe size. This adjustment will benefit nearly 200 000 lower-income households, many of which will see a reduction in fixed monthly service charges.

Electricity tariff increases are being limited to around 2 percent, significantly below Eskom's national average. This is expected to help households better manage utility costs in the coming year.

Debt Relief and Support Measures Introduced

Pensioners, grant recipients, and homeowners with properties valued below R7 million may now qualify for up to 50 percent debt relief on overdue municipal accounts. This applies to those who enter into repayment agreements, creating new opportunities for financial recovery.

Invested in Hope: A Long-Term Vision

This year's theme, "Invested in Hope", reflects the City's continued focus on growth and resilience. Planned spending over the next three years includes:

• R16.5 billion for water and sanitation infrastructure
   
• R5 billion for electricity system upgrades
   
• R3.4 billion for road maintenance and development
   
• R4.5 billion for expansion of MyCiTi public transport

These initiatives are expected to support over 130 000 construction-related jobs and contribute significantly to the City's future service capacity.

Steer & Co's Perspective

This year's budget offers a well-balanced approach to urban planning. It eases financial pressure on lower-income households while protecting long-term service delivery and infrastructure growth.

For property owners and trustees, this presents a valuable opportunity to:

• Reassess your municipal rates liability
   
• Review levy budgets and utility projections
   
• Explore debt relief eligibility
   
• Engage a property partner for tailored financial guidance

At Steer & Co, we believe that sound governance begins with clarity. Our team is ready to help you understand how these updates affect your property or scheme and to plan proactively for the months ahead.

Contact us to discuss how we can support you through these changes and help you manage your property investments with confidence.