The City has clarified recent media reports that claimed it plans to double the municipal rates on properties that are rented out for short durations, including those listed on Airbnb and Booking.com.

The City has denied that this is a new tax, but that all short-term letting premises are already required to pay commercial property rates under the City’s existing Rates Policy.

To improve compliance, a draft Short-Term Letting By-Law will go out for public participation soon.

This does not apply to primary residences that do some short-term letting, or to long-term letting – residential rates still apply.

The City says the aim is fairness: commercial short-term letting operations must pay commercial rates under the City’s existing Rates Policy.

According to the Metro, the proposed by-law will make it harder to game the system by only paying residential rates while operating a commercial short-term letting enterprise.

Over time, the City has been working to systematically identify non-compliant properties where residential rates are incorrectly being paid.

Further details, including the full draft by-law and public participation schedule, will be made available after all due Council processes.

In the interim, the City has encouraged short-term letters not to wait until new measures are introduced to promote compliance, but to approach the City now to ensure the correct commercial rates category is paid on residences primarily used for short-term letting.

Cape Town has become one of the most expensive property markets in Africa, and a growing number of homes are no longer being rented to residents.

Instead, many properties are being used as short-term holiday accommodation on platforms like Airbnb and Booking.com. There are currently an estimated 25,000 to 26,000 short-term rental listings across the city, representing tens of thousands of homes that are not available to people looking for long-term leases.

Some experts say this is having a direct impact on the rental market. With fewer properties available for long-term tenants, rental prices rise.

At the same time, local renters are increasingly competing with tourists and digital nomads who earn in stronger foreign currencies such as dollars, euros and pounds. For many landlords, short-term rentals can generate significantly more income per night than a traditional monthly lease.