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Airbnb or a long-term tenant: how to compare after the rates change

Commercial rates add a fixed cost to short-term letting in Cape Town, but they are one line in the comparison. For most properties the answer turns on how many nights you fill and what it costs to run them.

Key facts

Compare a full year for each route, after running costs and rates.
A long-term rental stays on residential rates. A short-term let over the 50% line pays commercial rates from 1 July 2027.
In the worked example below, commercial rates move the break-even from 138 booked nights a year to 163.
Time, wear, your own use of the property and scheme rules matter too, and no calculator captures them.

What to count on each side

Short-term letting

Income: your average nightly rate multiplied by the nights you expect to be booked, not the nights you list.
Running costs: platform fees, a management fee if you use one, cleaning, linen, utilities, wifi and consumables.
Rates: commercial if the property is over the 50% line, residential if not.

A long-term tenant

Income: twelve months’ rent, less any weeks the property stands empty between tenants.
Running costs: the letting agent’s fee, if you use one, and maintenance.
Rates: residential.

Levies, bond repayments and insurance are much the same either way, so they can be left out of the comparison.

A worked example

The figures here are made up to show the method. They are not typical values for any suburb. The property is a flat with a municipal valuation of R 2 800 000.

	Short-term	Long-term
Income for the year	R 360 000	R 192 000
How it is made up	R 1 800 × 200 nights	R 16 000 × 12 months
Running costs	R 108 000	R 19 200
Rates for the year	R 47 348	R 15 282
Left over	R 204 652	R 157 518

Running costs are taken as 30% of bookings for short-term and a 10% agent fee for long-term.

On these numbers short-term letting still comes out R 47 134 a year ahead, even on commercial rates. Before the change, on residential rates, it would have been R 79 200 ahead. The rates change costs this owner R 32 066 a year.

Where the break-even sits

The more useful number is how many nights you need to fill. In this example short-term letting needed 138 booked nights a year to match the long-term tenant on residential rates. On commercial rates it needs 163. An owner who was filling 150 nights was ahead before and is behind after.

Your own break-even will differ, because it depends on your nightly rate, your costs and the rent you could get. The calculator works it through with your figures.

What the numbers leave out

Your time. Short-term letting means guest messages, turnovers and repairs, or paying someone to handle them.
Your own use. A long-term tenant has the property all year. A short-term let can be blocked off when you or family want it.
Furnishing. Long-term rentals are often let unfurnished, so switching may mean storing or selling what is in the property.
Scheme rules. A body corporate or homeowners’ association can restrict short-term letting regardless of what the City allows.
Tax. Rental income is taxable on both routes. The treatment of expenses differs, so check with a tax practitioner.

The middle option

If the property is your primary residence, you can keep letting short-term and stay on residential rates by listing it for no more than 50% of its room nights. For a whole home that means up to 182 nights a year. The 50% rule guide has the limits for other set-ups.

Check your own property

Enter your valuation, bedrooms and nights listed to see which side of the 50% line you are on and what the rates would be.

Open the calculator

More guides

Sources: City of Cape Town, Short-term letting FAQs and Property rates 2026/27, Annexure 2. Last checked 10 November 2026.