Cape Town Airbnb hosts could pay triple rates

Cape Town's city council is considering a new by-law that could force Airbnb hosts to pay commercial rates, potentially tripling their property taxes, if their rentals are available for more than 183 days per year. The proposed Short-Term Letting By-law requires all short-term rental properties to be registered with the municipality and display a registration number.

Properties that exceed 50% of annual room nights as short-term rentals will be taxed as commercial accommodations, while those with 50% or less will remain residential. The city's finance committee member Siseko Mbandezi claims the new rules aim to create fairness in the hospitality sector by levelling the rates for commercial accommodation.

However, the move has raised concerns among hotel investors who fear it may discourage new developments due to the increased costs. The draft by-law, which was part of the city's latest rates policy adopted in June, will be open to public comment until October 5th. Currently, approximately 5,931 Airbnb listings are present in Cape Town's inner-city ward 115, which has a potential 11,815 units according to city planners.

The loss of potential housing units for residents has been a concern, contributing to the dwindling supply and increased rental and purchase prices.