Cape Town proposes new regulations for short-term rentals

The City of Cape Town has proposed a new by-law to regulate short-term rentals, which could significantly increase costs for property owners. Under the draft Short-Term Letting By-law, all properties listed on booking platforms such as Airbnb, LekkeSlaap, or Booking.com must register with the municipality and display a registration number on their listings.

A key provision of the proposal states that if a property is available for short-term rental for more than 50% of the year (183 nights or more), it will be classified as commercial rather than residential. This reclassification would subject owners to commercial property rates, similar to those charged for hotels and guesthouses. In some cases, these rates could be more than triple the current residential rates.

For example, an inner-city residential property valued at R2.8 million currently incurs a monthly rate of R1,274, whereas a commercial property of the same value would be charged R3,945. The city's latest rates policy, adopted on 29 June, already includes definitions for commercial accommodation based on these criteria. Properties or portions of homes, such as granny flats, that are not listed on short-term letting platforms will not be affected by these specific registration or rate requirements. The public can submit objections and comments via the City's website until 5 October.