Cape Town tariff ruling could change housing affordability nationwide

A court ruling in the Western Cape could have far-reaching consequences for South Africa’s property sector, making city services to high-value properties more affordable while putting extra pressure on low-earning tenants’ monthly bills.

In April 2026, the Western Cape High Court ruled against a City of Cape Town billing practice. The City based its City-Wide Cleaning Tariff, introduced in 2025, on property value, rather than on service usage, as is normal.  

This, along with other value-based billing elements in Cape Town's water and sanitation charges, was ruled unlawful after being challenged by the South African Property Owners Association and AfriForum.  

Judges said that the city had “unlawfully assumed a power not granted to it by the Constitution or legislation” by charging on a sliding scale.

Unless the city appeals, the new charges will be set aside from 30 June, and cleaning fees must be set differently in the new financial year starting in July.

What does the ruling mean for tenants and agents?

The Court ruled that the charges were unconstitutional, which could have wide implications for other cities with similar municipal structures.

In arguments before the court, the City of Cape Town argued that basing charges on property value makes them more affordable for low- and middle-income households, providing greater income assurance at the lower end while shifting more of the cost burden to ratepayers who can afford it.  

Under the value-based system, property value makes a big difference to cleaning charges. The charge for a property worth R2.3m (the average sales price in Cape Town in 2026) is R84.50 a month (inc. VAT) in 2025/26. For properties priced below R500 000, owners get a 100% rebate, while in the highest bracket for properties worth R100m or more, residents are charged around R14 000 a month.

If the city ends up charging lower-income households for cleaning, that would put more pressure on tenants who are already feeling the squeeze. Last month, we reported that the average tenant’s disposable income is falling due to rising debt spending.  

At the other extreme, if municipal bills were to fall for higher-value homes, that would make them more affordable. Agencies may see more demand from tenants and buyers at the upper end of the market.