If you own a Cape Town property, or are thinking of buying one, the Airbnb question is no longer as simple as: “What could I charge in December?”
The right property can still perform beautifully as a holiday rental. But proposed municipal rules, commercial rates, rising operating costs and Cape Town’s seasonal demand mean the full-year numbers matter more than the headline nightly rate.
Our honest view? Airbnb can still be worthwhile—but only when the property itself is a sound investment and there is a sensible back-up plan for quieter months.
Is Cape Town banning Airbnb?
No.
The City of Cape Town’s draft Short-Term Letting By-law is intended to register and monitor short-term rental properties and ensure that those used predominantly as commercial accommodation are placed in the correct municipal-rates category.
At the time of writing, public comment remains open until 5 October 2026.
If adopted in its current form, the proposed Cape Town Airbnb rules would require:
- Every property advertised for short-term letting on a booking platform to register with the City
- A unique City-issued registration number to appear on every listing
- Owners to provide the property address, erf number, municipal account number and any supporting information requested
- Owners, operators and booking platforms to share registration, availability and occupancy information with the City
- Booking platforms to stop advertising unregistered properties or listings without a valid registration number
The City says resulting rating-category changes would take effect from 1 July 2027, using information collected through the proposed registration system.
You can read the City of Cape Town’s short-term letting overview, the official draft by-law and the City’s short-term letting FAQ.
When could commercial property rates apply?
Commercial property rates could apply when a property is made available for short-term letting for more than 50% of its total annual room nights.
The important word is available. An unbooked night may still count if the room or property was offered online.
A property at or below the 50% threshold may remain residential for rates purposes if it meets the City’s Rates Policy requirements. Long-term rentals used as a tenant’s primary residence also remain residential.
The draft provides for compliance notices, fines, court interdicts and—in serious cases following conviction—imprisonment of up to six months. An affected person could appeal a City decision within 21 working days.
There would also be transitional grace periods before registration and platform data-sharing requirements take full effect.
What does the national short-term rental proposal say?
Separate from Cape Town’s proposed by-law, the national Department of Tourism has published a draft Code of Good Practice for Short-Term Rentals.
It is currently described as non-binding interim guidance while the Tourism Act is reviewed. The public-comment period has closed, but the final Code had not yet been gazetted at the time of this update.
The draft Code recommends that hosts:
- Provide accurate listings and accommodation that matches the advertising
- Communicate guest, visitor, noise, parking and community rules clearly
- Maintain appropriate liability insurance
- Provide smoke detectors, fire-safety information, emergency contacts and an accessible first-aid kit
- Enforce maximum occupancy and applicable body-corporate or homeowners’ association rules
It also encourages booking platforms to protect personal information, communicate complaints, assist with disputes and share legally permitted information with government.
You can read the official national draft Code of Good Practice.
These two proposals are separate. The national Code provides responsible-hosting guidance, while Cape Town’s proposed by-law introduces the possible registration, data-sharing and municipal-rates system.
Owners should still check their zoning, title deed, body-corporate or estate rules, insurance and bond conditions. Income-tax, VAT where applicable, consumer-protection, privacy and existing health-and-safety obligations also remain relevant.
Airbnb can still work—but the property has to suit it
In our experience, the Cape Town homes with the strongest short-term potential offer something guests cannot easily substitute: a remarkable view, walkability, excellent security, a genuine indoor-outdoor lifestyle or enough space for a group to stay comfortably.
Professional management also matters. Pricing, guest communication, cleaning, linen, maintenance and reviews all affect performance.
Before buying, we would want to know whether the property still makes sense after management fees, platform fees, commercial or residential rates, levies, utilities, insurance, cleaning, maintenance, finance costs and quieter periods are taken into account.
The best strategy may not be Airbnb versus long-term
Cape Town owners have more than two choices.
Holiday and short-term rentals
Holiday letting can suit a distinctive, well-located property with strong visitor appeal, particularly when the owner wants occasional personal use.
Income can be attractive during peak periods, but it tends to be more seasonal and management-intensive.
Six-month winter rentals
A furnished winter lease can provide more predictable income during Cape Town’s quieter season and reduce constant guest changeovers.
It may suit visiting professionals, relocating families, people renovating or buyers who want to experience an area before committing.
For some owners, holiday letting during summer and a fixed-term tenant through winter offer a useful middle ground.
Long-term rentals
A longer lease usually provides steadier monthly income, fewer changeovers and less day-to-day management.
Well-presented homes in Hout Bay, Llandudno and the Atlantic Seaboard can appeal to families, executives and international tenants settling into Cape Town.
Before you buy, test the investment properly
Airbnb potential cannot rescue a weak property investment. Look beyond the summer nightly rate and ask:
- What is the realistic net return after every operating and finance cost?
- Is there sufficient demand outside the summer season?
- How much competing short-term and long-term stock is available nearby?
- Could the property work as a winter or conventional long-term rental?
- Are short stays allowed under the zoning, building, estate and insurance rules?
- Will the location and property support long-term capital growth?
The strongest investment is often the one with options.
A property that can work as a personal base, professionally managed holiday rental and longer-term home is less dependent on one season or income model.
You may also find Property24’s guide to spotting a good property investment useful. The additional Cape Town consideration is flexibility: the rules, costs and alternative rental strategy matter as much as the headline income.
Three Cape Town properties—and three different strategies
Soho House, De Waterkant
This two-bedroom, two-bathroom apartment offers a wraparound balcony, two basement parking bays, air-conditioning, 24-hour security and a communal pool.
Its central position makes it worth comparing professionally managed short stays with corporate, executive or longer-term letting—subject to the building and City rules.
The Llandudno
With eight en-suite bedrooms, separate living areas, a penthouse suite, generous terraces and uninterrupted coastal views, this home has unusual flexibility.
A buyer might consider premium holiday letting, multi-generational living or a hospitality concept, subject to the necessary permissions and realistic operating costs.
Sandalwood Estate, Sandown
Not every good Cape Town investment needs to be an Airbnb.
This four-bedroom home in a secure Sandown estate offers approximately 298 m² of space and no transfer duty. Its family-friendly position near Parklands, Blouberg schools, shops and the West Coast may make a conventional family rental the more natural strategy.
Already own a property?
Cape Waterfront Estates can help you assess holiday-rental potential, fixed-term six-month winter rentals and longer-term letting.
Where specialist short-term management is needed, we can also connect you with trusted local operators.
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This article contains general property information and is not legal, tax or financial advice. The proposed City by-law and national Code may change. Check the latest official information and obtain professional advice for your circumstances.