The City of Cape Town has published a draft Short-Term Letting By-law, 2026, aimed at addressing how Airbnb-style rentals are advertised, how they are categorised and rated for municipal property rates purposes. Under the City’s existing Rates Policy, any property used predominantly for commercial short-term letting is already supposed to pay business and commercial rates rather than the lower residential tariff. The new by-law would introduce a mandatory registration system for every property listed on a booking platform (Airbnb, Booking.com and similar), require platforms to display a City-issued registration number on each listing, and compel platforms to share availability and occupancy data with the City so it can determine, objectively, whether a property is being run as a home or as a business.
At the centre of the proposal is a “50% rule”: a property is categorised as Business and Commercial property if it is listed as available for short-term letting for more than half of its total annual room-nights (bedrooms × 365 days). Owners who occasionally rent out a room or their whole home while away, and landlords on long-term leases, are not affected and would remain on residential rates.
The by-law is open for public comment from 5 August to 5 October 2026, after which the City will revise it for possible adoption by Council in early 2027. It is foreseen that from 1 July 2027, the City will begin moving identified properties over to commercial property rates where applicable.
The proposal has drawn wider scrutiny of its housing implications. Coverage in the Daily Maverick has questioned whether the by-law will meaningfully ease Cape Town’s inner-city housing squeeze or mainly serve as a rates-compliance measure, noting that Mayor Geordin Hill-Lewis has himself drawn a line between individuals renting out a room and investors running full-time Airbnb operations “like a hotel.” Other outlets, including News24, Bloomberg, Time Out Cape Town and Cape {town} Etc, have reported on the rates and market implications for owners and the short-term rental industry.
Read the source documents:
- Short-Term Letting in the City of Cape Town: Frequently Asked Questions
- Draft Short-Term Letting By-law, 2026 (full text)
- Executive Summary of the Draft By-law
- 2026/27 Rates Policy
Further reading:
- Daily Maverick — Is Hill-Lewis finally addressing Cape Town’s inner-city housing squeeze?
- Daily Maverick — Airbnb crackdown set to shift Cape Town’s housing market
- News24 — Cape Town eyes rates by-law for homeowners that ‘game the system’ with short-term rentals
- Bloomberg — Cape Town to Double Tax Rates on Airbnb, Short-Term Rental Properties
- Time Out Cape Town — City clarifies Cape Town ‘Airbnb tax’ requirements
- Cape {town} Etc — Cape Town moves to tighten commercial short-term letting compliance
Whether you own a property that lets occasionally, run a full-time short-term letting business, live near one, or simply have a view on how Cape Town should balance tourism income against housing pressure, the City wants to hear from you. Public comments close 5 October 2026 — read the draft by-law and FAQs above, then submit your comments to the City before the deadline.