The City of Cape Town has released a draft By-law that would require every Airbnb-style property to register, share data with the City, and be classified as residential or commercial. Here is what it says and what to do about it.
The City of Cape Town has published the draft Short-Term Letting By-law, 2026. It sets out, for the first time, a formal registration and monitoring system for short-term letting, and it confirms the classification test that determines whether a property is rated as residential or commercial. The By-law is still in draft form. This article summarises what it currently proposes.
What the By-law does
The stated purpose is to regulate, register, monitor, and enforce short-term letting across the City, so that properties used predominantly for commercial tourist accommodation are correctly classified for property rates. It sets out obligations for three parties: property owners, operators, and booking platforms such as Airbnb and Booking.com.
Registration is mandatory
- Every property used, or intended to be used, for short-term letting must be registered with the City before it may be advertised or listed.
- Registration data includes the physical address, erf number, and municipal account number. Booking platforms must collect this from owners and share it with the City.
- The City verifies the data and issues a unique registration number, which must be displayed on every listing.
- A listing without a valid, displayed registration number is not permitted.
De-registration and cancellation
- Registration is cancelled automatically on transfer of ownership. The municipal valuer then re-categorises the property.
- Owners or operators may de-register voluntarily by notifying the City in writing.
- The City may cancel a registration obtained on false or misleading information, after giving the owner notice.
- Once a registration is cancelled, platforms must remove the listing within 10 working days.
Data sharing and monitoring
Booking platforms operating in Cape Town must identify themselves to the City and provide a responsible contact point. The City will collect property addresses, municipal account numbers, and availability and occupancy data for each listing, to verify registrations, determine categorisation, and support monitoring and planning. Owners and platforms must provide further information on request.
The classification test
- The trigger is 50% of total annual room nights. Properties let for up to that threshold may be treated as residential, provided the requirements in the City's Rates Policy are met.
- Properties let beyond that threshold are treated as commercial property, and rates are levied on the commercial basis.
This confirms the mechanism flagged in the City's 2026/27 draft budget: properties operated as full-time short-term rentals move onto the commercial rates roll, where the rate-in-rand is materially higher and residential rebates fall away.
Compliance and penalties
- Authorised officials may issue a compliance notice specifying the contravention, the remedy required, and the deadline.
- Non-compliance is an offence. On conviction, a court may impose a fine, imprisonment of up to six months, or both.
- The City may also apply to court for an interdict or other civil relief.
- A decision made under delegated power may be appealed within 21 working days of notification.
Transitional arrangements
The By-law allows for a grace period before registration and listing obligations take effect, and a separate commencement date before booking platforms must start sharing data with the City. Both dates will be announced by public notice from the City Manager once the By-law is finalised. During the transition, the City may issue guidance rather than moving directly to enforcement.
What this means for investors
- If a property is let short-term for more than roughly half the year, budget for commercial rates and re-check the numbers on net yield.
- Confirm who is responsible for registration on managed properties, the owner or the appointed operator, and get the paperwork in order ahead of the grace period.
- Booking platforms will hold and share occupancy data. Assume the City's classification will be based on that data, not on self-reporting.
- Body corporates and HOAs with short-term letting policies should track the By-law's progress, since registration and display of a City-issued number will become a compliance issue at building level, not just an owner-level one.
Bottom line
This is a draft. The thresholds, obligations, and penalties described above are not yet in force, and the final version may change before adoption. Owners with short-term letting properties in the City should treat it as a strong signal of direction rather than a settled outcome, and plan accordingly.
Article written by: Louw & Coetzee Properties
021 976 2730 | www.lcproperties.co.za
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