Dear Property Executive
Spring is in the air, and changes to Cape Town's favourite rental market (holiday lets) are coming like a South-Easterly gale.
The City of Cape Town released its draft Short-Term Letting By-law this past week, and it will directly affect how Airbnb and holiday-let owners plan and structure their portfolios this season — both financially and strategically.
Here is what matters most:
Registration becomes mandatory. Every property listed on a booking platform will need a City-issued registration number displayed on the listing. No number, no listing — platforms are required to remove any that do not comply.
Booking platforms carry new obligations too, from identifying themselves to the City to sharing listing data.
The threshold is availability, not bookings — and this is the detail owners are getting wrong.
The City calculates your rates category using listing availability, not actual occupancy.
Multiply your bedrooms by 365 for your total annual room nights — a 3-bedroom house has 1,095. List that property as available for more than half of those nights, and it crosses into commercial rates territory, even with minimal actual bookings.
The only lever to stay under the threshold is limiting how many nights the property is listed as available. Earning less will not help you.
Occasional letting stays protected. Renting out a room in your primary residence, or offering long-term rentals, falls outside the commercial rates net.
There is enforcement behind it. The City can issue compliance notices, and some contraventions — such as advertising without a valid registration number — are treated as offences, with the City able to seek an interdict through the courts.
Two dates to track. A grace period will follow once the by-law takes effect, though its length has not been announced yet. Separately, the City has confirmed that any reclassification from residential to commercial rates would take effect from 1 July 2027, based on data collected through the new registration system.
This is still a draft, and public comment closes 5 October 2026. That matters, because the threshold as written measures intent to let, not income earned — a property listed year-round but rarely booked could still be pushed into commercial rates, while one with strong paying occupancy but a shorter listing window stays residential.
We believe the fairer measure is actual bookings and occupancy, not availability, and we would encourage every reader with a stake in this — owners, bodies corporate, and scheme trustees alike — to say so in a formal submission before the deadline.
Submit your comments to STL@capetown.gov.za or via the City's public participation portals at capetown.gov.za/haveyoursay and capetown.gov.za/collaborate. Written submissions can also be delivered to any City subcouncil office or library. Submissions from named schemes and complexes carry particular weight in this process.
If you'd like help working through what this means for your portfolio or scheme, reach out — we're happy to talk it through.
For further reading:
City of Cape Town: Draft Short-Term Letting By-law, 2026 — Executive Summary
City of Cape Town: Short-term Letting FAQs
New laws for Airbnbs and other short-term rentals in Cape Town
Unpacking the City of Cape Town's proposed Short-Term Letting By-law
'Airbnb' by-law — its proposed impact on Cape Town property rates, and how to have your say
Yours in Property
Jacques Grove
Principal and Dreamer
