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Finally, some good news about rates in Cape Town.
The City of Cape Town is putting forward a plan that could give thousands of cash-strapped residents some much-needed breathing room.
In a new proposal, the city is looking to write off outstanding R2.2 billion “irrecoverable” debt for qualifying households.
The proposed debt relief targets poor and working-class ratepayers who are in arrears and unlikely to ever be able to settle what they owe. The city says this move is meant to help residents get back on their feet, while also cleaning up its own books and improving future revenue collection.
News24 reports the proposal was tabled at the mayoral committee meeting on Tuesday and was immediately rubberstamped by the City’s executive.
Residents who qualify as indigent – meaning they meet certain low-income thresholds and criteria – would be able to apply to have their municipal debts erased as of 30 June 2022. If approved, they’ll need to keep up with current payments going forward and remain on the indigent register to avoid future build-up.
Alderman Siseko Mbandezi, Cape Town’s Mayoral Committee Member for Finance, says the idea is to “give residents a fresh start.” He added that many residents fell behind during the COVID-19 pandemic and are now unable to catch up, despite their best efforts.
“Over recent years, the rand has weakened, resulting in an increase in fuel and food prices. This has further increased inflation, which had resulted in higher interest rates, higher debt levels and a decline in economic growth.”
“The high living costs, as well as the additional and consistent substantil electricity tariff increase by Eskom, have pu a strain on household budgets. It became particularly challenging for low-incom families who are already struggling to make ends meet.”
The city already offers ongoing support to indigent residents, such as free basic water and electricity, subsidised rates, and waste removal. But officials say the burden of old debt often prevents people from accessing help, especially if they’ve inherited debt through family property or historical arrears tied to an account.
- Residential properties valued at between R45,000 and R2.5 million will be eligible for a 100% once-off write-off.
- Residential properties valued at between R2.5 million and R7 million will be eligible for a 50% once-off write-off.
- Residential properties with a zero municipal valuation would see all debt written off.
While this is a once-off proposal, Mbandezi stressed that it’s not a blanket write-off for everyone. It’s aimed at households who are genuinely struggling and already receiving some form of municipal relief. Property owners who can afford to pay – or simply choose not to – won’t be getting a free pass.
Public comment is open until mid-July, and if approved by the council, the debt write-off could begin in the new financial year.
This could offer real relief to struggling residents, but is it cynical to wonder how the City plans to make up the shortfall?
[Source: News24]
