3OCT

Cape Town eyes commercial rates for lets

2 min read

13:31UTC

Cape Town's draft Short-Term Letting By-law would make every listed property register and would rate a home available for more than 183 nights a year as commercial from July 2027.

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Key takeaway

Cape Town's draft by-law would tax year-round short lets at commercial rates instead of banning them.

On 28 September the news site GroundUp reported that Cape Town has more than 27,000 Airbnb listings, nearly 6,000 of them in inner-city ward 115, where hosts with ten or more properties hold 40% of listings⁠¹. GroundUp found one host controlling 147 units.

The City of Cape Town's draft Short-Term Letting By-law, open for public comment until 5 October, would make every listed property register with the City and display its number. A property available for more than 183 nights a year would be rated as commercial from 1 July 2027, at roughly three times the residential rate. The by-law "ensures fairness in the commercial accommodation sector," said Siseko Mbandezi, the City's mayoral committee member for finance. The housing group Ndifuna Ukwazi said short lets are "strangling our housing supply."

Mexico City drew its cap at the same 183 nights before hosts froze it in court. Cape Town prices the full-time let and bans nothing. In practice, a host who lets a flat all year keeps the listing and pays the higher rate on it.

Deep Analysis

In plain English

Cape Town charges property owners a yearly tax called rates. Homes pay a lower rate than businesses. The city now proposes to treat a flat as a business if it can be booked for more than half the year. That flat would pay about three times the home rate from July 2027. Every host would also have to register with the City and show a registration number in the listing. Residents can comment on the plan until 5 October.

Deep Analysis

Root Causes

Concentration drives the by-law. GroundUp found nearly 6,000 of the city's more than 27,000 listings in ward 115, and hosts with ten or more properties hold 40% of listings there. On Lowdown's arithmetic, that is about 2,400 listings held by large operators in one ward.

The by-law's registration rule closes the data gap. Every listed property must register with the City and display its number, and platforms may share data with the City directly. Without that link, the City cannot tell which listings are available more than 183 nights, which is half the year.

The rating timetable matters. The commercial category starts on 1 July 2027, which gives owners until then to change use.

What could happen next?

Consequence
Full-time hosts face a rates bill about three times higher from 1 July 2027, which may raise nightly prices or remove listings.
Medium term · Assessed
Opportunity
Mandatory registration and direct data sharing give the City a dataset it does not have today.
Short term · Assessed
Risk
If the rate gap is too small for large operators, listings stay and housing supply does not recover.
Long term · Suggested

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: Spain's rejected decree tried the tax route too, with 10% VAT on tourist lets that had been exempt. Cape Town uses a municipal property-rating category instead, which has one decision-maker, the City, and no national vote to lose.

Counter-parallel: Airbnb filed a reconsideration motion against Madrid's €64m fine after the High Court of Justice of Madrid refused to suspend it on 23 March 2026 (ID:2898). A platform with the resources to litigate a fine can also litigate a data-sharing duty.

Immediate: no host pays the new rate before 1 July 2027. The comment window opened on 5 August and closes on 5 October.

Structural: a flat that lets all year would pay roughly three times the residential rate from 1 July 2027. A host who lets for fewer than 183 nights stays in the residential category, so the by-law rewards part-time letting and penalises full-time operators.

Consensus view: Finance mayoral committee member Siseko Mbandezi said the by-law "ensures fairness in the commercial accommodation sector". The City's logic is a property-rates one: a flat available more than 183 nights a year is a business and should pay as one.

Counter-view: The housing group Ndifuna Ukwazi says short lets are "strangling our housing supply", which frames the problem as lost homes. A higher rate does not return a flat to long-term rental; it only prices the listing.

Key tension: Whether a rates differential of about three times is large enough to move a host with ten or more flats, who is the operator the by-law is built to reach.

Sources:GroundUp

Mentions:City of Cape Town →Short-Term Letting By-law (Cape Town) →Ndifuna Ukwazi →GroundUp →Airbnb →Mexico →High Court of Justice of Madrid →Mexico City →Madrid →Spain →Cape Town →

First Reported In

Update #14 · Spain's Congress sinks its rental decrees

GroundUp· 3 Oct 2026

Read original →

Different Perspectives

UK Culture Secretary Lisa Nandy

Nandy told MPs around 3 September that England's register of short lets will be fully operational by March 2027. Wales opened compulsory registration for every paid stay on 1 October, with a deadline of 31 March 2027.

Venice budget assessor Michele Zuin

Zuin told Il Gazzettino on 21 September that a charge of about €30 on peak days from 2027 would be the most concrete solution. He added that the city must set new rules together with government and Parliament.

Saudi Premium Residency Center

The Center added 31 services on 22 September, according to the newspaper Okaz. Primary holders now register employment contracts through the Qiwa platform, and no Saudi Press Agency release confirms the package.

Greek prime minister Kyriakos Mitsotakis

Mitsotakis announced at the Thessaloniki International Fair on 5 September that new short-let registrations in central Athens and Thessaloniki stay suspended to 31 December 2027. No ministerial decision has been found, and golden-visa applications fell 39% from January to July.

Cape Town housing group Ndifuna Ukwazi

Ndifuna Ukwazi backs the city's draft by-law, which rates lets available over 183 nights a year as commercial from 1 July 2027. Finance mayco member Siseko Mbandezi said it ensures fairness in the commercial accommodation sector.

Klungkung Regency and KPK

Klungkung took 2.7bn rupiah on Nusa Penida from 1 to 9 September against 1.1bn in the first ten days of August. The Corruption Eradication Commission (KPK) sent files on eight suspects in a residence-permit extortion case to prosecutors on 30 September, alleging 145.5bn rupiah was taken.