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Cape Town’s commercial rates for Airbnb owners, explained
From 1 July 2027 the City of Cape Town plans to charge commercial property rates on homes that are used mainly for short-term letting. The commercial rate is about 2.4 times the residential rate and comes without the residential reduction, so the bill on a R2.8 million flat roughly triples.
Key facts
- The City expects to start moving properties to commercial rates from 1 July 2027.
- Affected: properties that are nobody’s primary residence and are let short-term as a business, and primary residences listed for more than 50% of their annual room nights.
- Not affected: long-term rentals, and homes that are let now and then.
- 2026/27 tariffs: residential is 0.7010c in the rand with the first R620 000 rates-free on homes valued up to R8 million. Commercial is 1.6910c in the rand with no reduction.
Who is affected
The City’s Rates Policy treats a property as commercial accommodation in two situations.
- Nobody lives there. The property is not a primary residence and is used for commercial short-term letting. A flat bought to run on Airbnb all year is the typical case.
- Someone lives there, but it is mostly let. The property is a primary residence, and it is listed for short-term letting for more than 50% of its total annual room nights.
The City’s rule of thumb is that using most of the property for most of the year for short-term letting makes you a commercial operator. Letting a room, a cottage, or the whole home for part of the year usually doesn’t.
A home on a long-term lease stays residential, because it is the tenant’s primary residence. Hotels, guest houses and B&Bs are already rated commercial.
What it costs
These are monthly rates at the City’s 2026/27 tariffs. They exclude levies, improvement district charges and services, and the residential column assumes the R620 000 reduction applies.
| Municipal valuation | Residential | Commercial | Extra a month |
|---|---|---|---|
| R 1 500 000 | R 514 | R 2 114 | R 1 600 |
| R 2 800 000 | R 1 273 | R 3 946 | R 2 672 |
| R 5 000 000 | R 2 559 | R 7 046 | R 4 487 |
Tariffs are reset every July, so the figures that apply from 1 July 2027 will differ. The City has said the change in category does not change the tariffs themselves.
When it starts and how it is applied
The updated Rates Policy took effect on 1 July 2026 with a grace period. The City expects to begin moving properties across from 1 July 2027, and has said rates will not be charged retrospectively for the period before that.
After that date the City looks at any rolling 365 days. Once a property is found to be over the line, the change is made at the next supplementary valuation, which usually happens every two months, and it applies from the date the 50% threshold was crossed. The property stays commercial until its availability falls back below 50% over a 365-day period.
How the City will know
A separate Short-Term Letting By-law proposes that every property on a booking platform carries a City registration number, and that platforms share availability and occupancy data for registered short-term lets. The City will measure the nights a property is listed as available, not the nights it is booked. See the guide to registration.
What does not change
- Zoning. The Municipal Planning By-law already allows short-term letting, so no rezoning is needed.
- Body corporate and HOA rules. Schemes can still set their own rules on short-term letting. The City doesn’t regulate those.
- Tax. The City says the change has no bearing on what you owe SARS.
What owners can do
There are three broad routes, and which one suits you depends on your numbers.
- Stay short-term and absorb the cost. For a well-booked property the extra rates may be a small share of income.
- List fewer nights. If the property is your primary residence, keeping it at or under 50% keeps it residential. The 50% rule guide shows how many nights that allows.
- Switch to a long-term tenant. Long-term rentals stay on residential rates. The comparison guide shows how to weigh the two.
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 calculatorMore guides
- The 50% rule: how to count your room nights
- Airbnb or a long-term tenant: how to compare after the rates change
- Registering a short-term let in Cape Town: what the draft by-law proposes
Sources: City of Cape Town, Short-term letting FAQs and Property rates 2026/27, Annexure 2. Last checked 10 November 2026.