On 30 April 2026, the Western Cape High Court ruled that Cape Town's fixed charges for citywide cleaning, water, and sanitation, which were based on property value, were unlawful and unconstitutional.

The South African Property Owners Association (Sapoa) challenged the charges, arguing that linking service fees to property value effectively turned them into a property tax—a power reserved for the national government.Cape Town has opted not to appeal, highlighting the strength of the court’s decision.The city now faces a budget shortfall of around R2 billion and is revising its draft budget, set for public comment on 27 May 2026.The ruling is significant for municipalities across South Africa, as it underscores the legal boundaries for service charges and property taxes.

Many local governments rely heavily on property rates and associated surcharges, creating an unsustainable dependence on a relatively small group of property owners.The court emphasised that legitimate service charges must reflect the actual cost of services rather than property value.

This case also highlights the increasing financial pressures on property owners, with rising rates and maintenance costs outpacing inflation and property value growth.

The ruling serves as a reminder that municipalities must broaden revenue sources, ensure transparent billing, and avoid exploiting property owners with disguised taxation.