A client phoned us last week to ask whether she should sell her flat.
She lets it on Airbnb for about six weekends a year, usually when she's away visiting family, and she'd read enough headlines to be convinced the City was about to double her rates.
The good news is that she's fine, and nothing in the draft by-law touches her, which is true for most of the owners who have called us since the news broke.
Some owners will be affected though, and the difference between the two groups comes down to a single number.
What the City is proposing
The City of Cape Town has published a draft Short-Term Letting By-law, 2026. It deals with how properties listed on booking platforms are registered, how they're advertised, and how they're categorised for municipal property rates.
Three things would change.
Every property listed on a platform such as Airbnb or Booking.com would need to register with the City.
Platforms would need to display a City issued registration number on each listing.
Platforms would share availability and occupancy data with the City directly, so that categorisation rests on evidence rather than on what an owner declares.
None of this is entirely new in principle. Under the City's existing Rates Policy, a property used predominantly for commercial short-term letting is already meant to pay business and commercial rates. What the by-law adds is a way of seeing who's doing it.
The 50% rule, which is the part that decides everything
A property is categorised as Business and Commercial if it's listed as available for short-term letting for more than half of its total annual room nights.
Room nights are worked out simply, as bedrooms multiplied by 365.
So, a two-bedroom flat has 730 room nights in a year, and the line is drawn at 365. A one-bedroom flat has 365 room nights, and the line is drawn at roughly 182.
Cross that line and the property moves onto business and commercial rates. Stay below it and nothing changes.
It's worth saying plainly that owners who let a room or their whole home occasionally, and landlords letting on long term leases, stay on residential rates. They aren't what this is aimed at.
The detail most people miss
The measure is availability, not bookings.
That catches people out. An owner might look at an occupancy rate of 40% and assume they're comfortably under the threshold, but if the listing sat open and available for 300 nights of the year, it's the 300 that counts.
This is the single most useful thing to check on your own listing. Not how often it was booked, but how often it was open.
If you've been leaving your calendar permanently available and filling roughly half of it, you may be closer to the line than you think.
What happens next, and when
Public comment is open until 5 October 2026.
If the City proceeds, a revised by-law would go to Council for possible adoption in early 2027, and identified properties would begin moving onto commercial rates from 1 July 2027.
That gives owners a reasonable runway, and it gives anyone with a view a real opportunity to shape the final version.
The City has published the full draft by-law along with an executive summary and a set of frequently asked questions. Comments that engage with a specific clause tend to carry more weight than general objections.
The bigger question underneath the rates one
There's a wider conversation happening here, and it's about housing rather than revenue.
Cape Town's inner city housing pressure is well documented, and some coverage has questioned whether this by-law will ease it or mainly improve rates compliance. Mayor Geordin Hill-Lewis has drawn his own line between someone renting out a room and an investor running a property like a hotel.
Our view, from where we sit, is that the effect on the long-term letting market will be gradual rather than dramatic.
If holding a property permanently available becomes more expensive, some owners will shift toward longer leases, and in areas like the City Bowl and the Atlantic Seaboard that could slowly release stock back into the long-term rental pool.
That's a slow shift rather than a switch, and it's worth watching over the next two years rather than reacting to this month.
What we'd suggest doing this week
Open your listing and look at your availability calendar for the last twelve months, not your booking history.
Count your room nights, which is number of bedrooms multiplied by 365, and then halve that figure to find your line.
If you're anywhere near it, decide deliberately whether you want to sit above or below it, because from 1 July 2027 that decision has a number attached to it.
And if you have a view on the draft, submit it before 5 October. This is the stage where input still shapes the outcome.
Over to you
If you let short term in Cape Town, had you checked your availability rather than your bookings? We'd be interested to hear where owners are landing on this, particularly trustees weighing up what it means inside a scheme.
If you'd like help working out where your property sits, or you're considering a move toward a long term let and want to understand the numbers, our team is happy to talk it through.
