• City plans municipal rules to tax short-term rentals at hotel-level rates
• Properties mainly used for short stays would face a 135% tax increase
• Cape Town had 26,484 Airbnb listings as of September 2025

The city administration of Cape Town in South Africa plans to tighten taxation on properties used for short-term rentals, including those listed on Airbnb and Booking.com, Mayor Geordin Hill-Lewis told Bloomberg this week.

Bloomberg reported that the city wants to introduce a municipal regulation requiring properties primarily used for short-term rentals to pay commercial fees similar to those applied to hotels and guesthouses. The plan includes a 135% increase in taxes on these properties relative to their market value. “We are correcting the imbalances in taxes. An Airbnb is a decentralized hotel, so it has to pay the same rates and taxes a hotel does,” Hill-Lewis said. He added that the measure would require platforms to share with authorities a list of locations offered for short-term rental on their websites.

Cape Town, South Africa’s second-largest city and a major tourist destination, has seen a steady conversion of primary residences into short-term rental properties over the past decade. Data from InsideAirbnb show that about 26,484 properties in the city were listed in this category on Airbnb as of September 28, 2025, more than double the number recorded in Barcelona (11,828) and Amsterdam (10,366).

While the expansion of tourist accommodation has created income opportunities for many property owners, authorities say it has also contributed to a sharp rise in housing prices for residents, a criticism already voiced in other major cities such as Paris and London. Airbnb has not yet responded to the proposed tax. However, the U.S.-based company, founded in 2008, outlined its position in a report published in 2024.

“Airbnb recognizes the importance of affordable and accessible housing in Cape Town and the rest of South Africa, especially given the legacy of home ownership and inequality. […] we want to be part of the solution and help ensure that local authorities are equipped to regulate short-term rentals, should there be a need. We have long led calls to work with the national government to develop evidence-based, balanced and proportionate rules to regulate short-term rentals,” the company said.

The report stated that in 2023 about 2 million people stayed in properties listed on the platform across South Africa, including 700,000 visitors in Cape Town, contributing about 14.4 billion rand, or around $900 million, to GDP. “Dedicated listings rented on Airbnb represent an incredibly small fraction of Cape Town’s 818,000 housing units. They represent just 0.9% of all formal housing units—less than 1 in 100—in the city and less than 1.5% of the number of additional housing units needed to meet growing housing demand over the next four years,” the document said.

Espoir Olodo