MAIN IMAGE: Michelle Cohen – principal practitioner at Leapfrog Property Group Johannesburg North East, Steven van Rooyen – principal practitioner at Leapfrog Property Group Western Seaboard, Julia Fish – regional manager at JoburgCAN, Neil Gopal – SAPOA CEO
Senior writer
In May, the Johannesburg Member of the Mayoral Committee (MMC) tabled its City of Johannesburg (CoJ) 2025/2026 budget. It prioritises infrastructure upgrades, job creation, electrification, and improved billing systems. And, of course, this themed budget “A Financially Sustainable Joburg” means price increases: for electricity (+12.74%); water and sanitation (+13.9%); refuse (+6.6%); and property rates (+4.6%). This budget tops out at R89.4 billion.
It’s similar for the City of Cape Town (CoCT), whose budget is set at R84.1 billion, focused on maintaining, improving, and expanding services; rolling out capital projects, and implementing the Integrated Development Plan (IDP).Its property rates increase is almost double that of Johannesburg at 7.96%. Both budgets have faced criticism.
Johannesburg’s ‘it is what it is’ attitude frustrates
In Johannesburg, the DA accused the ruling coalition of creating a politically motivated budget. More scathing is the criticism from The Joburg Community Action Network (JoburgCAN), which says that while the City claims to have followed the required legislative process, the substance of its response reveals a concerning disregard for the growing dissatisfaction among residents and the economic pressure facing households and businesses alike.
“Again, we raised the principle of cost reflective pricing guided by legislation, like being charged for sanitation based on your property size. Sadly, the City responded that it was ‘addressed last year in their comments and that this is CoJ policy,'” said Julia Fish, regional manager for JoburgCAN. “We believe that the City should be able to justify the costs of services. You pay for the amount of water you consume, which makes sense; however, how does the City justify paying for sanitation services based on your property size? They can’t!”
JoburgCAN reiterates its call that a municipal budget must be more than just an accounting exercise. “It must serve as a tool to restore trust, deliver tangible value, stop wastage and strengthen Johannesburg’s resilience. The City’s dismissive interpretation of meaningful engagement undermines public confidence in the governance process,” Fish added.
The rates effect on the property market
Michelle Cohen, principal property practitioner at Leapfrog Property Group, Johannesburg North East, believes that the 12.74% electricity tariffs, 13.9% water and sanitation, 6.6% refuse removal, and 4.6% property rates increases will lead to lifestyle trade-offs, decreased rental affordability, add another barrier to home ownership and cause buy-to-let investors to recalibrate.
She does note that the fact that Johannesburg Water officially took over billing responsibilities for water and sanitation services from the City’s Revenue Shared Services (RSSC), could result in better service delivery, “On paper, it represents a focused effort to streamline accountability, with the hope that service complaints, inaccurate bills, and sluggish response times become relics of the past. For residents, it means knowing exactly who to call–”and hopefully, getting quicker resolutions when things go wrong”.
Even as the CoJ ignores these remarks about its controversial budget, Cape Town is not faring well either.
CoCT might be going to court
In his address to the City Council in June, Mayor Geordin Hill-Lewis talked about the City’s ‘Invested in Hope’ Budget, stating, “The only other alternative to property value determining your fixed contribution to infrastructure and fixed service costs, is for everyone to pay a flat charge regardless of whether you are low-income or affluent. We must be clear that lower-income and wealthy households cannot make equal contributions to infrastructure and fixed service costs. It’s not fair, nor sustainable, and believe me, households at all levels of the property value spectrum do contribute their fair share within their means”.
SAPOA (the South African Property Owners Association) is challenging the CoCT’s linking of certain fixed charges to property values, specifically the Cleaning Tariff, the Fixed Water Charge, and the Fixed Sanitation Charge, in the Western Cape High Court.
Neil Gopal, SAPOA CEO, explained to the media that “they contravene the applicable constitutional and national legislative framework applicable to the imposition of rates and the levying of tariffs for municipal services. Because they are linked to property values, the three items of the budget are in fact property rates imposed outside of the legislation which governs the imposition of such rates.”
The Cape Town Collective Ratepayers’ Association (CTCRA) has issued a press statement, stating its support for a court bid to have these tariffs reviewed and set aside. CTCRA chairperson Bas Zuidberg explained that the Association has been advised that the city’s linking of fixed charges for water and sewage to property values was unlawful.
Whether the costs fall to landlords or tenants, the financial stress is undeniable
Steven van Rooyen, principal property practitioner at Leapfrog Property Group, Western Seaboard, shares, “We are receiving conflicting opinions on whether this cleaning fee is part of rates and taxes and therefore the landlord’s responsibility or seen as consumption which would shift the liability to tenants.
Rates and taxes continue to erode rental returns, and tenants are facing higher-than-inflation rental increases in the Western Cape- these additional charges, whether deemed to be for the tenant or landlord, will undoubtedly put further financial stress on residents of the Western Cape”.
