Cape Town is moving to tighten oversight of short-term rentals, with some Airbnb-style properties set to face commercial property rates if they operate like full-time businesses. The City’s draft Short-Term Letting By-law is expected to go out for public comment and is aimed at helping officials identify listings that should no longer be rated as ordinary homes.

When a Listing May be Treated as Commercial

According to the City’s short-term letting FAQ, a property may be treated as commercial if it is not a primary residence and is used for short-term letting, or if it is a primary residence but is available for short-term letting for more than 50% of its total annual room nights. That calculation is based on the number of bedrooms multiplied by 365 days, then measured against how often those rooms are listed as available on booking platforms.

If a property crosses that threshold, it may be classified as commercial accommodation and charged at business and commercial rates, similar to hotels, guesthouses and bed and breakfasts. The City says the goal is to improve fairness across the accommodation sector and make sure commercial operators are not paying residential rates.

Casual Hosts are not the Main Target

The City has stressed that the proposed changes are not aimed at residents who occasionally rent out part of their home to supplement their income. Its FAQ says part-time short-term letting in a primary residence would generally remain residential, especially where only part of the property is rented out for limited periods. Long-term rentals are also not affected.

New Registration Rules Could Follow

The City also plans a mandatory registration system for all properties listed on online booking platforms. Under the proposal, each listing would need a City-issued registration number displayed publicly, while platforms would be required to remove listings that do not show a valid number. The City says platforms would also have to share availability and occupancy data to help officials assess how properties are being used.

Housing Pressure Remains Part of the Debate

The move lands at a time of rising concern over housing affordability in Cape Town. Critics argue that more homes are being pushed into the short-term rental market instead of long-term housing. The City, however, says its approach is about rates compliance and fair treatment, not restricting tourism. It also says changes to ratings categorisation are only expected from 1 July 2027.