From bad to worse for Cape Town homeowners

Despite the City of Cape Town proposing lower rates and broader relief to offset rising property values, local bodies warned that some homeowners face much steeper valuation increases, raising affordability concerns.

Recently, the City of Cape Town published new property valuations, stating that the average increase for residential properties is 17%.

The City also announced plans to reduce its residential property rate-in-rand by 10.2% and expand rates relief to shield homeowners from sharp increases despite strong property value growth.

These measures, along with higher rates-free thresholds and broader middle-class benefits, aim to ensure that around 60% of households see either no change or a decrease in their property rates.

Overall, the city said these proposals will help keep property ownership costs among the lowest in South Africa while supporting rising household wealth through growing property values.

While these developments may seem like a win for homeowners, the Cape Town Collective Ratepayers’ Association (CTCRA) expressed a different view.

The CTCRA, whose members represent approximately 10% of the City’s residential properties and 60% of collected residential rates, said it has received numerous reports from homeowners in member associations.

These members claimed that their valuations have increased by between 25% and 140%. “In most instances, these increases have been applied despite there being no improvements to the properties concerned,” CTCRA said.

“These new valuations will exacerbate the affordability crisis affecting Cape Town housing.”

The association argues that the city’s relief measures may be overstated, as properties that rise by more than 11% in value will still face higher rates, meaning substantial increases are likely for many households.

It also noted that municipal rates are only one component of total property-related costs, with fixed charges for water, sanitation and city-wide cleaning already linked to property values in the 2025/26 budget.

These charges, which can make up a significant portion of non-consumption costs, may increase further under the new valuations, yet the city has not provided clarity on how these will change.

The CTCRA also criticised the lack of transparency around other property categories, such as commercial and industrial properties, and said the municipality should have updated its rates calculator alongside the valuation release to give residents a full picture of the financial impact.

The association also pointed to an ongoing legal challenge by SAPOA and Afriforum over the linking of fixed service charges to property values, with judgment still pending.

It urged homeowners to review their valuations carefully and submit objections where they believe the figures are inflated.

The City of Cape Town responds

Daily Investor reached out to the City of Cape Town to respond to these claims and explain how property valuations are conducted.

“Estate agents undertake an estimation of value by considering market activity, as well as the unique improvements and attributes of the subject property being valued,” the city said.

“Such an estimation of value is effectively a comparative market analysis (CMA). As such, an estate agent does not purport to be a professionally qualified valuer.”

Instead, they are industry professionals with experience of what values achieve in a particular property market.

As a result, the city said their opinion on value is an informal estimate based on their knowledge of the latest sales, especially comparable ones.

The values they provide are typically contained in a one-page certificate that has no legal standing, and they are therefore provided for free.

“A professional valuer, by contrast, must be registered with the South African Council for the Property Valuers Profession (SACPVP),” the City of Cape Town said.

Such a person has a tertiary education in property valuations and passed a board exam to become a fully-fledged member of this body.

There is also a registration category for trainee valuers who work under the mentorship of a fully qualified valuer.

“As such, their opinions of value have a legal standing in court. Professional valuers analyse comparable sales and value-forming attributes of these sales and those of the subject properties in much greater detail.”

These attributes typically include elements such as erf extent, dwelling extent, number of living areas, bedrooms and bathrooms.

They also consider factors such as layout, fixtures and fittings, the extent of outbuildings, the quality and condition of construction materials used, views, zoning and title deed restrictions.

The Valuation Department collects data on the above attributes and many others for each residential property, with different attributes collected for different property types.

They use this information to value most properties through a statistical process called computer-assisted mass appraisal (CAMA).

“The results of this process are critically reviewed in relation to each property’s value forming attributes, by property valuers all registered with SACPVP and in the full-time employment of the City,” the City of Cape Town said.

It is also a statutory requirement under the Local Government: Municipal Property Rates Act (2004) that all these valuers be registered with SACPVP to maintain high standards.

City clarifies valuation methodology

The city noted that the valuations it determines may often differ from the values contained in estate agents’ certificates.

“The main reason for this is that the values provided by the estate agent are often only a broad estimate of value, without expert knowledge of a specific property market.”

“The City’s valuations, in contrast, are far more detailed and based on much more information and reviewed by a registered valuer with expert knowledge of each property type in a particular geographical area that the valuer is responsible for.”

The city advised that property owners who want to obtain an independent, well-informed and comprehensive valuation report should contact SACPVP for a list of possible valuers.

For the 2025 Valuation Roll, the market valuations are determined based on market conditions as at 1 July 2025. Homeowners who want to object to their property valuation can find information on the City of Cape Town’s website.

“The GV2025 public inspection and objection period is prescribed in terms of the Municipal Property Rates Act and is scheduled for 20 February 2026 until 30 April 2026,” the city said.

“Although the prescribed period is 30 days, the City will be providing customers more than double the prescribed time to submit objections.”

The city did not respond to the CTCRA’s claim that new property valuations will exacerbate increases in fixed charges for water, sanitation and “city-wide cleaning” to property values.

However, they did respond to the claim that owners of vacant, commercial, industrial and agricultural properties have been in the dark, since there have been no updates on the Rate-in-the-Rand for these property categories.

In this regard, the city clarified that Rate-in-the-Rand is proposed to drop by 10,2% for all categories.