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Update: proposed new regulations governing short-term letting in South Africa

May 4, 2026

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Recent reporting by The CapeTowner has highlighted proposed new regulations governing short-term letting in South Africa. The draft bylaw aims to strengthen compliance by enabling the City to source data directly from online letting platforms. It also introduces a formal method to determine whether a property’s short-term letting exceeds a 50% availability threshold—beyond which it may be classified as “business and commercial” by the Municipal Valuer.

In practical terms, this threshold is calculated by assessing the proportion of nights a property’s bedrooms are available for short-term letting over 365 days, as outlined in the 2026/2027 draft Rates Policy. Daily Investor offers a simplified explanation: multiply the number of rooms available for short-term letting by the number of nights they are available and divide this by the total annual room nights.

For example, renting out one bedroom in a three-bedroom home for a full year equates to a 33% short-term letting availability. Renting out two bedrooms for the same period raises this to 66%, potentially triggering a commercial classification.

Data from Inside Airbnb underscores the scale of the issue. Cape Town currently hosts more than 26,000 Airbnb listings—exceeding the combined totals of cities such as Barcelona and Amsterdam. In contrast, the long-term rental market remains constrained, with fewer than 2,000 listings available. Notably, 2025 saw long-term-rental increases of nearly 30% for studio apartments in the Cape Town CBD, placing additional housing pressure on local residents.

This evolving landscape presents clear challenges, and we will continue to monitor regulatory developments closely in the months ahead.

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