The City of Cape Town has defined the remit of the planned short-term letting by-law, in the face of widespread reporting about a proposed “tax hike” on Airbnb-style rentals.
The proposed by-law will make it “harder to game the system,” as some short-term letting businesses are paying residential rates while actually operating a commercial short-term letting enterprise.
Under the City’s existing Rates Policy, all premises primarily used for commercial accommodation businesses, including short-term letting, are required to pay commercial property rates.
Primary residences that occasionally do short-term letting and long-term rentals and those where the tenant uses the property as a primary home will continue to pay residential rates. However, those operating commercial short-term letting businesses but currently paying residential rates instead of commercial rates could face hefty rate increases.
