Cape Town mayor Geordin Hill-Lewis says it would be “patently unfair” for the city to charge wealthy property owners the same tariffs as lower-income or middle-class households.
The South African Property Owners Association (Sapoa) is suing the city in the Cape Town High Court over three homeowner tariffs, linked to property value, implemented on July 1.
Sapoa brought an urgent interdict against the city, challenging its new fixed charges for cleaning, water and sanitation. The organisation wants the tariffs reviewed and set aside.
Sapoa also published a legal notice inviting other parties and individuals to join the litigation as friends of the court. But on Thursday, Hill-Lewis described the court action as an attempt by Sapoa to derail the city's pro-poor budget and “protect their own vested interests”.
Hill-Lewis said the city had linked certain fixed charges to property value under its “Invested in Hope Budget 2025/26”.
“Sapoa represents the country’s wealthiest and largest property owners — mainly shopping mall owners — who have benefited significantly over the years from Cape Town’s functionality and success. However, they now argue that the city should charge the biggest property owners the same as individual low-income families,” he said.
“The city simply cannot agree that wealthy property owners should be charged the same as lower-income or middle class households. This would be regressive, would place a disproportionate burden on ordinary families, and would be patently unfair.”
Hill-Lewis said the city's budget protected homes valued at under R2.5m and extended rates relief to middle-class homes, “all while preserving the city’s critical infrastructure and service investments”.
“In contrast, this court application by the richest of the rich property portfolio holders seeks to go back to a system of regressive taxation which hits ordinary families, and the poor, the hardest,” said Hill-Lewis.
He said if Sapoa were to succeed in their argument, the effect would be “to have ordinary families effectively subsidising the wealthiest property owners”.
“The city scrapped the old ‘pipe levy’ charge — which arbitrarily linked fixed charges to a home’s pipe connection size — because it was unsustainable for R50m and R500,000 homes to make equal contributions to Cape Town’s infrastructure and fixed service costs.
Infrastructure must be available for all and must always work. To achieve this, costs must be borne by all ratepayers
— Geordin Hill-Lewis, Cape Town mayor
“Fixed charges linked to property value is a lawful, more fair and equitable way for Capetonians to contribute within their means to our city’s infrastructure programme and fixed service costs. Cross-subsidising — where the better off among us help to fund services for the less fortunate — is the only sustainable way to ensure a working city of hope for all.”
He said the city had engaged extensively with Sapoa which had “accepted the necessity of Cape Town’s R40bn infrastructure budget over three years”.
He said Sapoa had offered no workable alternative means of distributing fixed infrastructure and service costs among ratepayers.
“The only alternative to fixed charges linked to property value, is for everyone to pay a flat charge regardless of whether you are low-income or affluent. This is not a sustainable nor fair way to fund infrastructure investment and the fixed costs of service delivery. If a flat charge of say R500 is billed, and one household earns R20,000 while the other earns R100,000 a month, this charge represents 2.5% and 0.5% of their monthly income respectively,” said Hill-Lewis.
“This means the impact on the lower-income household is actually five times more than on the higher-income household, which is regressive and inequitable.”
He said fixed charges were necessary because all ratepayers needed to contribute to municipal infrastructure, not only those who “can’t afford to invest in alternative water and electricity sources”.
“Cape Town would not have a working electricity or water service to speak of if the city only charged people for consumption. Many costs are fixed in nature — pipelines, trucks, cables, staff to service it all. These costs remain, no matter how much people consume, and so fixed costs must be met with a portion of fixed revenue. Infrastructure must be available for all and must always work. To achieve this, costs must be borne by all ratepayers,” said Hill-Lewis.
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