The City of Cape Town has proposed a new by-law that would make all short-term rental hosts register their properties. Homes available for short-term letting for 183 nights or more a year could be charged commercial property rates.
The public can send objections and comments on the draft Short-Term Letting By-law through the city’s website until 5 October.
Under the draft rules, every property listed on platforms such as Airbnb, LekkeSlaap and Booking.com must be registered with the city. No property may be listed without a registration number, and that number must be shown on the listing.
A property that is available to rent for more than half the nights in a year will be treated as commercial, not residential. The city will then charge rates on the same basis as hotels and guesthouses.
The bill will differ from property to property, but it could be more than three times higher. Using the city’s own rates calculator, an inner-city home valued at R2.8 million pays R1 274 a month in residential rates. A commercial property of the same value pays R3 945 a month.
Properties or granny flats rented out without being listed on short-term letting platforms will not be affected. They will not need a registration number.
“The proposed by-law ensures fairness in the commercial accommodation sector,” said Siseko Mbandezi, the mayoral committee member for finance.
Mbandezi said changes to how properties are rated would start on 1 July 2027. He said this would be based on data from the proposed registration system.
He said the city had been working to find properties used for commercial accommodation that were paying residential rates. He said the city still supports the tourism economy and sees short-term letting as an important sector.
“However, the City believes that the playing fields for businesses should be equal, with all those using a property for commercial accommodation paying the correct rates,” Mbandezi said.
The main rules are already part of the city’s latest rates policy, which was adopted on 29 June. That policy defines commercial accommodation as a home available for short-term letting for more than 50% of annual room nights.
According to the Federated Hospitality Association of Southern Africa (Fedhasa), Mayor Geordin Hill-Lewis met the association in April. He reportedly said the by-law aimed to create a fairer hospitality sector.
Hill-Lewis reportedly said the rules would “address large commercial operators running multiple apartments as ‘decentralised’ hotel businesses while continuing to pay residential rates”. Hotel investors had said this made new hotel projects hard to justify.
The city has not described the by-law as a way to ease pressure on housing. But its own Inner City Local Spatial Development Framework, approved by council on 30 October last year, says 70% of city centre homes are used for short-term accommodation.
Inside Airbnb data shows that of more than 27 000 Airbnb listings in Cape Town, 5 931 are in ward 115, which covers the inner city. Only 1 777 of those belong to hosts with a single listing.
More than 40% of inner-city listings belong to hosts with ten or more units. One host has 147 apartments or entire homes listed in the inner city.
In 2024, housing group Ndifuna Ukwazi objected to a 40-storey building planned for Bree and Prestwich streets. It was to include 442 apartments of between 15 and 30 square metres.
“Given average household sizes, these apartments will never be able to accommodate normal families,” said the group’s attorney, Jonty Cogger.
Public comment on the draft by-law closes on 5 October, and the new rating categories are set to take effect on 1 July 2027.
Source: this article is based on reporting by The Citizen. Image: The Citizen. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.