Cape Town keeps rates rises below 4% in draft budget, water up by 9%

Cape Town homeowners can expect their rates bills to rise by less than 4% from July.

Unveiling the city council's R49bn draft budget on Thursday, deputy mayor Ian Neilson said the rate in the rand would be 22% lower than in the current year.

However, a new general valuation that will take effect from July 1 has increased the value of Cape Town’s 875,000 homes by an average of 34% since the last general valuation. This means the new rate of 0.555c will be charged on more rands.

At the same time, the city council is proposing to reduce all valuations by R300,000 before charging rates, up from R200,000 in the current year.

Calculations by TimesLIVE show the monthly rates bill for a house valued at R2m in 2015, now valued at R2.68m, will increase by 2.57% to R1,100.75.

The bill for a R4m house in 2015 (now valued at R5.36m) will increase by 3.3% to R2,340.25.

And the bill for an R8m house (now valued at R10.72m) will rise by 3.63% to R4,819.25.

Water and sanitation prices will rise by 9%, according to the draft budget, electricity prices will increase by 8.88% and refuse removal will cost 5% more.

Any household with a monthly income below R4,500 will pay nothing for rates and refuse removal.

Neilson said the council's priorities in the first budget, crafted under mayor Dan Plato, included a "focus on crime and grime and on the delivery of human settlements opportunities".

The deputy mayor, who is also the mayoral committee member for finance, said: "Much work has also been done to ensure that rates and tariffs are as affordable as possible for residents and businesses.

"There has been a concerted effort by the city administration and political leadership to ensure that rates and service charges are as affordable as is humanly possible for residents and businesses."

The council "balancing act" had been conducted "amid a high rate of urbanisation, a decrease in the number of customers who pay for services such as water and electricity due to the continuous introduction of savings and efficiency plans, or the so-called off-grid phenomenon, and also reduced grants from national government".

Neilson also announced a proposal to recalibrate water-restriction levels, meaning that from July level 3 restrictions, under which Cape Town is currently operating, will be known as level 1 restrictions.

The new restrictions reach level 3 before entering the "emergency" level at which city water consumption will be pegged at 500 million litres a day.