South Africa: Cape Town Moves to Charge Airbnb Hosts Hotel-Style Rates
South Africa · EXPAT
Key Facts
- —The country South Africa has about 65 million people and an economy of roughly US$430 billion (World Bank, 2025), slightly smaller than Denmark’s. Cape Town, its second-largest city, is a top destination for tourists and remote workers.
- —Why it matters Cape Town has more than 27,000 Airbnb listings, most of them entire homes. Locals blame short-term letting for pushing rents beyond reach, especially in the city centre.
- —Why now Public comment on the City’s draft Short-Term Letting By-law closes on Monday 5 October, and local media and housing activists have stepped up criticism this week.
- —What happened The draft rule requires every listing to register; homes available for more than 183 nights a year would pay commercial rates from 1 July 2027.
- —The numbers On the City’s own calculator, a R2.8 million (about US$168,000) inner-city home pays R1,274 (US$76) a month residential, R3,945 (US$237) commercial.
- —What it means for you Hosts and property investors face registration and possibly triple rates; visitors may see fewer listings or higher nightly prices in peak season.
- —Still open The final text after public comment, how strictly the 183-night test will be enforced, and whether a primary-residence rule is added.
Cape Town wants Airbnb hosts who let homes for most of the year to pay hotel-style property rates. Critics say the plan collects money but does little for residents priced out of the city.
Cape Town, South Africa’s second-largest city and a magnet for foreign tourists, is about to tighten its Cape Town Airbnb rules. Public comment on a draft Short-Term Letting By-law closes on Monday 5 October.
The City of Cape Town, the municipal government run by Mayor Geordin Hill-Lewis, wants every short-term listing registered. Housing activists say the plan misses the bigger problem: homes lost to tourists.
What the by-law actually does
The draft requires every property listed on platforms such as Airbnb, Booking.com and LekkeSlaap, a South African holiday-rental site, to hold a municipal registration number. That number must be shown on the listing.
If a listing is available for more than half the nights in a year, or 183 nights, the property would be treated as commercial. It would then pay property rates on the same basis as hotels and guesthouses.
Homes or granny flats let out without being listed on a platform are not affected, according to GroundUp, a Cape Town news site. They would not need a registration number.
How much more hosts could pay
Bills vary by property, but commercial rates can be more than three times residential ones. GroundUp ran the City’s own rates calculator on an inner-city home valued at R2.8 million (about US$168,000).
At residential rates the monthly bill is R1,274 (about US$76). At commercial rates the same property would pay R3,945 (about US$237). Conversions use 16.67 rand per US dollar (open.er-api.com, 2 October 2026).
Siseko Mbandezi, the City’s mayoral committee member for finance, said rating changes would apply from 1 July 2027, “based on data from the proposed registration system”. The 50% test is already written into the rates policy adopted on 29 June.
Why the City says it is acting
Mbandezi said the by-law “ensures fairness in the commercial accommodation sector”. He added that the City still supports tourism and sees short-term letting as an important part of it.
Hill-Lewis reportedly told the hotel association FEDHASA in April that the rules target large operators running apartments as “decentralised” hotels. Hotel investors had complained of unfair competition from hosts paying residential rates.
The scale of the Cape Town Airbnb market
Inside Airbnb, an independent data project, counts 27,072 Cape Town listings, according to a Business Day editorial in August. Of these, 84.5% are entire homes or apartments rather than spare rooms.
The same data show 62.2% of hosts had more than one listing, which suggests professional operators. The three largest hosts had 215, 177 and 136 listings.
The inner city is the hot spot. GroundUp, citing Inside Airbnb, reports 5,931 listings in ward 115, which covers the central business district, and more than 40% belong to hosts with ten or more units.
The City’s own Inner City Local Spatial Development Framework, a planning blueprint approved in October 2025, says only 30% of central homes are owner-occupied or let long-term. The rest are “either hotel managed or Airbnb”.
Why critics say it falls short on the Cape Town housing crisis
The City has not presented the by-law as a housing measure. Leila Kidson, writing in GroundUp on 1 October, calls it “essentially an exercise in re-classification” for rates purposes.
She argues that the City points to 14,000 planned affordable homes that remain largely unfunded and unbuilt. Meanwhile, she writes, about 23,000 entire homes operate as short-term listings.
The Cape Town Collective Ratepayers’ Association, which groups 45 civic bodies, warned the draft “may not be sufficient to alter the commercial incentives” that favour short-term letting. Kidson also notes that hosts could stay just under the 50% threshold.
Her proposal is a primary-residence rule, allowing listings only in homes where the host actually lives. Vancouver, in Canada, adopted such a rule in 2018, and the policy was later extended across British Columbia.
What it means for visitors, hosts and investors
For foreign buyers who bought Cape Town flats to let to tourists, the arithmetic changes. Registration becomes compulsory, and listing a property for most of the year could triple its rates bill.
Some owners may close listings in the quiet winter months to stay under the limit, local hosts have told News24, a South African news site. That could push nightly prices up in the October to March peak season.
For tenants and remote workers seeking long leases, any relief would be slow. The rating changes would not apply before mid-2027, and nothing in the draft forces a unit back onto the rental market.
What to watch next
After comments close on 5 October, the City must publish a final text for council approval. Watch whether it keeps the 183-night test, tightens enforcement or adds a primary-residence requirement.
Readers tracking similar pressures across the continent can follow the wider pattern in Africa: The New Scramble.
Frequently Asked Questions
When would Cape Town’s Airbnb rules take effect?
Public comment on the draft by-law closes on 5 October 2026. The City says changes to rating categories would apply from 1 July 2027, based on data from the new registration system.
Which Cape Town Airbnb hosts would pay commercial rates?
Properties listed on platforms such as Airbnb, Booking.com or LekkeSlaap and available for more than 183 nights a year. Homes let out without being listed on a platform are not affected.
How much more would hosts pay?
It varies by property. On the City’s calculator, a R2.8 million (about US$168,000) inner-city home pays R1,274 (US$76) a month at residential rates and R3,945 (US$237) at commercial rates.
Will the by-law ease the Cape Town housing crisis?
The City has not presented it as a housing measure. Critics, including the Cape Town Collective Ratepayers’ Association, say it may not change the incentives that favour short-term over long-term letting.
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