If you rent out a Cape Town flat on Airbnb for most of the year, your municipal bill could more than double from July 2027. The City of Cape Town has drafted a Short-Term Letting By-law that would reclassify properties let out for more than half their annual room-night capacity as commercial accommodation — and commercial rates are steep.
The maths is stark. Take an inner-city property valued at R2.8 million: as a residential property it would pay roughly R1,274 a month in rates, but R3,945 a month once classified as commercial. That's an extra R2,671 a month, or over R32,000 a year, before you count any other costs of running a rental.
It's not a blanket hit on everyone with a listing. Hosts who occasionally let a room to top up their income, or who keep their property available for short-term letting at 50% or less of annual capacity, would stay on residential rates. The City's argument is straightforward: if a home effectively operates as a business, it should be rated like one, while occasional letting remains a legitimate way for residents to make ends meet.
The proposed by-law also introduces a registration system. Every property advertised on booking platforms would need to register with the City and show a municipal short-term letting registration number on its listing, with platforms, owners and operators required to hand over data on availability and occupancy. For travellers, that could mean fewer ghost listings and a clearer sense of what's a genuine, registered rental — but it could also tighten the supply of apartments in a city already famous for its holiday-let market. There are currently more than 27,000 Airbnb listings across Cape Town, nearly 6,000 of them in the inner city, so the scale of what's at stake is significant for both hosts and visitors.
The City frames the change as a way to level the playing field — hotels and guesthouses already pay commercial rates — while still supporting short-term letting as part of the tourism economy. Whether that balance holds will be tested in the public participation process.
If you host in Cape Town, the date that matters now is 5 October 2026: that's when public comment on the draft by-law closes. Anyone affected — hosts, platforms, guesthouse owners — has a window to submit feedback before the rules are finalised. And if you're a regular visitor who books apartments in the City Bowl or Sea Point, expect the rental market to look different by the time this comes into force: some marginal hosts may sell up or switch to long-term tenants, while the serious operators will simply price the rates into their nightly charges.
