Cape Town proposes STL by-law to reclassify properties using Airbnb/Booking.com — owners urged to comment by 5 October 2026

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The proposed amendments to the City’s Rates Policy, tabled in March this year, propose changes to how properties used for short-term letting are rated, including using data from short-term letting booking platforms such as Airbnb and Booking.com to determine whether a property is used primarily for commercial short-term accommodation.

The City stresses the process is about rates classification, not land-use zoning, so if a property is available for short-term letting for more than 50% of the year, it could be classified as a business- rather than a residential property, potentially subject to higher rates.

Importantly the by-law rate classfication is not based on nights booked but rather on how much of the year the property is made available for short-term letting. If you list your holiday apartment on Airbnb all year, even if guests only stay 100 nights, it's still available for booking 365 nights, so it could cross that 50% threshold and be rated as commercial. But, if you only make it available for say three months of the year, over the holidays as an example, that's well under half the year, and the property would generally remain rated as residential.

"In summary, the by-law will require booking platforms, owners and operators to provide information for registration and to share data on listing availability and occupancy to support the City’s property-rating categorisation process," the City says.

"All properties listed on any booking platform will need to be registered with the City and have a City-issued STL registration number displayed with its advertised listings. Failing this, booking platforms will be mandated to remove the listing in question."

Higher rates, costs

Generally, commercial properties are charged a higher business and commercial tariff than residential properties. So, if an Airbnb property is reclassified as commercial, the owner's property rates bill could increase, potentially significantly, depending on the property's municipal value.

Supporters might say the new proposed bylaw would level the playing field with hotels and guesthouses who are already zoned as commercial properties, and would ensure proper rates compliance, but some Airbnb hosts are pushing back on the 50% threshold, data-sharing concerns and higher commercial rates.

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Meanwhile, some homeowners who supplement their income with short-term letting are up in arms that they may be footing a higher than expected property rate bill come July 2027.

It's important to note this bylaw will not only impact Airbnb owners but also that homeowner who lives in their four-bedroom house and short-term lets the remaining three bedrooms for the entire year and that property manager who short-term lets five bedrooms in a six-bedroom villa for the entire year. Only cases where an entire home is rented out as a long-term rental, or - for example - where a homeowner long-term rents two bedrooms in their three-bedroom house for the entire year - will be exempt.

Using the City of Cape Town’s 2026/27 rates, a R2m studio apartment that qualifies as the owner’s primary residence would pay roughly R806 a month in residential property rates. For a non-primary-residence Airbnb, the figure would be about R1,160 a month. If either property were reclassified as business and commercial, the rate would be roughly R2,818 a month, before any applicable rebates or exemptions.

For a non-primary-residence R2m Airbnb charging R600 a night, the potential increase of about R1,658 in monthly property rates would require roughly three additional booked nights a month to cover the difference, before other costs. In practice, the number of additional nights needed would be higher once platform fees, cleaning costs and taxes are taken into account.

And if you're talking about an owner-occupied qualifying primary residence, the increase would be much larger — roughly R2,012 a month (R2,818 minus R806), meaning about four additional R600 nights per month, before expenses.

While the City says the change aims to align property use with rating categories, industry players warn it may have unintended consequences for homeowners and investors operating in the short-term rental market.

“Where a property is effectively being run as a full-time accommodation business, there is certainly an argument that it should not necessarily enjoy all the same municipal rating treatment as a primary residential home,” says Tony Clarke, managing director of Rawson Property group.

“However, there is a very important distinction between an investor operating multiple units as a business and an ordinary homeowner who may let out their property for a few weeks a year to help offset rising costs.”

Community scheme concerns

Scores of individuals are asking for clarity on how the proposed by-law will work, particularly within the context of community schemes. Cape Town’s proposed short-term letting by-law could have wider implications for sectional-title complexes and homeowners’ associations, they argue.

Director and head of Community Schemes and Compliance at law firm Van Deventer Dowlath & Marx Inc., Wasserman highlights three critical operational realities that trustees and owners will have to deal with, starting with the false assumption that municipal registration equals authorisation.

“A City short-term letting registration number is an administrative registration for the purposes of the municipal short-term letting and rates-compliance regime. It is not, in itself, permission to conduct short-term letting and does not override a community scheme's valid rules or other private-law restrictions,” she stresses.

“However, once the municipal database is active, unit owners in complexes where short-term letting is restricted or prohibited will apply for a City number, receive it, and then wave their certificate at trustees or directors as proof that the City has given them permission to operate.”

Her concern is that the draft by-law says nothing to prevent this misconception. “We saw the same confusion when business and liquor licenses were issued in residential complexes, and it took years of adjudication and court proceedings to resolve. A single clause inserted into the by-law stating that registration is granted for rating purposes only, and confers no right to violate scheme rules, will prevent years of unnecessary governance disputes.”

Foundations of scheme governance

The second gap affects the fundamental nature of scheme governance. Because the City’s threshold focuses strictly on availability, a complex’s internal rules will determine whether its owners cross into a commercial rates bracket.

“Trustees have historically debated short-term rentals as a security, noise, and amenity issue,” says Wasserman. “From 1 July 2027, however, it becomes a direct financial consequence. A body corporate whose rules effectively limit the number of nights for which a unit may be advertised or made available for short-term letting to 90 nights a year would, if complied with, prevent that unit from crossing the City's 50% availability threshold.

“Conversely, a scheme with no restrictions leaves every letting owner exposed to commercial-rate reclassification. Rules that were once about lifestyle now carry severe municipal-rates consequences.”

Warning that changes to rules have to be handled meticulously, Wasserman says sectional-title conduct rules require a special resolution, must be reasonable, must apply equally to all owners of units used for substantially the same purpose, and only take effect once approved and certified by the Community Schemes Ombud Service (CSOS).

Complexities for body corporates

The third omission involves community schemes that generate revenue by letting out common property or scheme-owned accommodation, as well as single-title schemes.

“Plenty of bodies corporate and HOAs list guest suites, visitor flats, caretaker accommodation, or clubhouse cottages on booking platforms. However, the draft raises unresolved questions for schemes or developments where accommodation situated on common property or on a single rateable property is advertised for short-term letting,” Wasserman notes.

“It is not immediately clear how registration and the room-night methodology are intended to operate where the person conducting the letting is a body corporate, HOA, or other scheme entity, or where multiple occupiers share a single rateable property.”

That uncertainty may be particularly significant in single-title developments, including certain share-block, life-right, and retirement arrangements, where multiple occupiers may reside on one rateable property. “If a single resident lets short-term, the draft offers no mechanism to isolate that use, which exposes the entire property to commercial rates,” she states.

“Clarification is required as to whether and how short-term letting by one occupier would be isolated for rating purposes rather than attributed to the rateable property as a whole. Retirement schemes, which are least able to absorb commercial rating spikes, are also the least likely to be represented in the comment pool.”

Time to speak up

Capetonians now is the time to have your say.

“Trustees, directors, and managing agents should read the draft by-law now, and submit formal public comments before the 5 October deadline, bearing in mind that submissions from named complexes carry substantial weight," Wasserman urges.

“Schemes should also now put short-term letting on their next agenda, review their letting rules, and ensure that their submissions ask for specific clauses for community schemes and single-title developments before the system goes live.”

You can comment online; email This email address is being protected from spambots. You need JavaScript enabled to view it. or deliver your written concerns by hand to your local library or SubCouncil office.

The public comment window for the draft by-law closes on Monday, 5 October 2026.