Cape Town Would Triple Rates on Short-Term Lets Available More Than Half the Year

Cape Town's Draft Short-Term Letting By-law, 2026 would require every property advertised on a short-let platform to register with the City and would reclassify any home available for short-term letting more than half the year as commercial accommodation, lifting the monthly municipal rates bill on a R2.8 million inner-city flat from R1,274 to R3,945. Public comment closes on 5 October 2026 and the rating change would take effect on 1 July 2027.

What it means for a foreign buyer

If you own a Cape Town apartment and list it on Airbnb or Booking.com, the figure that decides your rates bill is availability, not occupancy. The threshold is 183 nights a year, half the calendar, measured on the availability you publish rather than the nights you actually sell. On the City's own worked example the reclassification costs R2,671 a month, or R32,052 a year, on a single R2.8 million flat. A property you list all year and fill at 55 percent crosses the line; the same property with the calendar closed for six months does not. That is a pricing decision you now have to make deliberately, and it has to be made before the registration system starts reporting your availability to the City.

If you are underwriting a Cape Town purchase on short-let income, run the numbers at commercial rates and treat the residential figure as the optimistic case. The by-law also requires the City-issued registration number to appear in your advertisements, which means a managing agent cannot quietly run the listing on your behalf without the property being identifiable. Owners letting on long leases to tenants who occupy the home as a primary residence are outside the by-law entirely, so the long-let route keeps residential rating, and local mortgage pricing after September's repo rate increase to 7.25 percent is the other half of that calculation.

Comment closes on 5 October 2026.

What changed

The draft by-law introduces compulsory registration for residential properties let to tourists and short-stay visitors. Registered owners must display the City-issued registration number in listings and supply information on how often the property is available and used. Properties available for short-term letting for more than half the year are to be classified as commercial accommodation and rated accordingly.

The rates arithmetic is where the cost sits. Commercial rating in Cape Town runs at roughly three times residential. On the R2.8 million inner-city property the City used to illustrate the change, the monthly bill moves from R1,274 to R3,945. Long-term rentals where the tenant occupies the property as a primary residence are excluded.

The scale of what is being captured is unusual. Cape Town carries more than 27,000 short-let listings, of which 84.5 percent are entire homes or apartments rather than spare rooms. In Ward 115, covering the inner city, there are 5,931 listings. Of those, 1,777 belong to hosts with a single listing, while more than 40 percent of listings sit with hosts running ten or more units. The largest single operator holds 147 units.