Airbnb under pressure in Cape Town as City targets ‘commercial’ listings
· The South African
Cape Town is tightening oversight of short-term rentals, with new proposals that could see some Airbnb listings reclassified as commercial businesses.
The City of Cape Town says its draft Short-Term Letting By-law, soon to go out for public comment, will introduce new tools to improve compliance with existing property rates rules.
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Earlier this year, The South African cleared confusion around a rumoured “Airbnb tax.” This was when the City first proposed a by-law aimed at identifying commercial short-term rental properties.
At the centre of the proposal is a plan to source data directly from online platforms to assess how frequently properties are listed for short-term stays.
How Airbnb listings could be classified as ‘commercial’
Under the proposed system, a property could be classified as a commercial operation if it is available for short-term letting for more than half of the year.
This threshold is calculated based on how often a property’s bedrooms are listed over a 365-day period.
If the 50% mark is exceeded, the property may be reclassified as “business and commercial” by the Municipal Valuer.
That would mean paying higher commercial property rates, similar to hotels, guesthouses and B&Bs.
The City says the aim is to ensure fairness across the accommodation sector.
City says move targets compliance, not tourism
Officials stress that the changes are not aimed at casual Airbnb hosts.
Homeowners who rent out part of their primary residence occasionally, or rely on long-term tenants, will still fall under residential rates.
“The use of commercial property rates does not apply to people supplementing their income by renting out some of their residence,” the City said.
Instead, the focus is on identifying full-time short-term letting operations that are currently paying residential rates.
The City of Cape Town maintains that it supports tourism and short-term letting, but says all operators should be treated equally under the Rates Policy.
Public participation on the proposed by-law is expected to open soon, while the draft 2026/27 Rates Policy is already available for comment.