Cape Town’s short-term rental hosts could face a sharp increase in municipal property rates from July 2027 under a proposed new by-law.
Cape Town, South Africa / Sharaan Muruvan / Unsplash
The City of Cape Town is proposing that properties available for short-term letting for more than 50% of their annual room-night capacity be classified as commercial accommodation rather than residential property.
That could mean a significant increase in monthly rates for hosts operating short-term rentals for much of the year.
For example, GroundUp used the City’s rates calculator to compare an inner-city property valued at R2.8 million. Its current residential rates would be about R1,274 a month, compared with R3,945 a month under the commercial category. That is an increase of R2,671 a month, or more than R32,000 a year.
The proposed rules would also require all properties advertised on booking platforms to register with the City and display a municipal short-term letting registration number on their listings. Booking platforms, owners and operators would also have to provide information about listing availability and occupancy.
Not every host will be affected in the same way. The City says commercial rates would not apply to people who occasionally let part of their home to supplement their income, while properties available for short-term letting for 50% or less of their annual room-night capacity may remain classified as residential.
The proposed changes come as Cape Town’s short-term rental market continues to grow. There are more than 27,000 Airbnb listings in the city, according to Inside Airbnb data cited by GroundUp, with almost 6,000 in the inner city.
The City says the proposed by-law is intended to ensure properties being used as commercial accommodation are paying the appropriate rates, while continuing to support short-term letting as part of Cape Town’s tourism economy.
For hosts, the immediate deadline to watch is 5 October 2026, when public comment on the draft by-law closes.
Rates and figures cited in this article are based on information available at the time of publishing and may change. The proposed Short-Term Letting By-law remains subject to the City of Cape Town’s public participation and legislative processes.
Sources: City of Cape Town; Fullview; GroundUp; 2OceansVibe
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