7 August 2026
Published by: City of Cape Town, Media Office
An Update for Short Term Rental Owners in Cape Town
The City of Cape Town has published a Short Term Letting in the City of Cape Town: Frequently Asked Questions, updated in August 2026. The information below is a summary of the City’s document and is provided to help short term rental owners understand the proposed changes.
The City’s proposed Short Term Letting By Law aims to create a fair and transparent framework for monitoring and regulating short term letting, while distinguishing between properties used primarily as homes and properties operating primarily as commercial accommodation. The City states that its intention is not to restrict short term letting or tourism.
Who May Be Considered a Commercial Short Term Rental?
According to the City of Cape Town, a property may be considered commercial if it is not a primary residence and is used for commercial short term letting.
A primary residence may also be considered commercial if it is used or made available for short term letting for more than 50% of its total annual room nights. Properties that remain primarily residential and only undertake occasional short term letting can remain residential.
The City defines short term letting as the temporary letting of a furnished property, or part of a property, to transient guests for a fee. This differs from medium and long term rentals, where a property is occupied under a lease or rental agreement as a primary residence.
How Does the 50% Threshold Work?
The City calculates total annual room nights by multiplying the number of bedrooms by 365.
For example:
• A one bedroom property has 365 annual room nights.
• A two bedroom property has 730 annual room nights.
• A four bedroom property has 1,460 annual room nights.
The City will look at the number of nights each bedroom is available for short term letting and compare this with the property’s total annual room nights.
Importantly, the City states that it will consider listing availability rather than the number of nights actually booked. This is intended to measure how much a property is being made available for commercial short term accommodation.
For example, a three bedroom primary residence where two bedrooms are available for short term letting for 120 nights a year would be at 22% availability and remain residential under the City’s example. A one bedroom apartment available for short term letting throughout the year would reach 100% and would be classified as commercial.
What Does This Mean for Property Rates?
The proposed changes are focused on municipal property rates.
Properties primarily used as commercial accommodation may be moved from residential rates to business and commercial property rates. Properties that remain below the applicable threshold, as well as qualifying long term rentals, remain residential. Hotels, guesthouses and B&Bs are already classified as commercial.
The City says properties will be assessed on an ongoing basis using a 365 day rolling period. If a property exceeds the 50% availability threshold, the change in rating category is expected to take effect through the next supplementary valuation. If availability later falls below 50% within the relevant 365 day period, the property can move back below the threshold.
The City currently anticipates that identified properties could begin moving to commercial property rates from 1 July 2027, following the public participation and legislative process. A grace period is also expected to give owners time to adapt to the new system.
The City also states that there will be no change to service tariffs and that the proposed rating change will not create additional national tax obligations. STR owners remain responsible for meeting their existing tax obligations to SARS.
Will Short Term Rentals Need to Be Registered?
Under the proposed By Law, all properties listed on booking platforms will need to register with the City. This includes apartments, houses, hotels, guesthouses and B&Bs.
Registered properties will receive a City issued short term letting registration number, which must be displayed on booking platform listings. Booking platforms will be required to remove listings that do not display a valid registration number.
The City also proposes that booking platforms share availability and occupancy information for registered short term rental properties to help determine how properties are being used.
If a property is removed from a booking platform, the owner can notify the City so that the registration can be disabled.
What About Zoning, Body Corporates and HOAs?
According to the City, the proposed changes will not require a zoning change because short term letting is already permitted under the Municipal Planning By Law.
Body corporates and homeowners associations can continue to establish their own rules regarding short term letting within their buildings or communities. These rules are separate from the City’s proposed framework.
When Will the New By Law Take Effect?
The City’s draft Short Term Letting By Law is currently open for public comment from 5 August to 5 October 2026.
Following the public participation process, the City expects to update the draft where necessary and table it for adoption by Council in early 2027. The City has indicated that a grace period will be provided before the new system is implemented.
What Should STR Owners Do Now?
Based on the City of Cape Town’s FAQ, STR owners can use this period to:
• Review how frequently their property is made available for short term letting.
• Understand whether their property is primarily residential or commercial.
• Keep booking platform information and availability accurate.
• Check any body corporate or HOA rules that apply to their property.
• Stay informed as the proposed By Law progresses through the public participation and adoption process.
The City describes its approach as a way to distinguish commercial short term accommodation from occasional short term letting while continuing to support tourism and the wider accommodation sector.
Please note: This article is a summary of the City of Cape Town’s Short Term Letting in the City of Cape Town: Frequently Asked Questions, updated August 2026. It is intended for general information only and does not replace the City’s official documentation or professional legal, tax or municipal advice.
Published by: The City of Cape Town, Media Office