The City of Cape Town is poised to more than double the taxes levied on homeowners renting out their properties through platforms like Airbnb and Booking.com. This initiative aims to tackle the pressing issue of affordable rental housing in the city, a concern that residents have frequently voiced.
As reported by Bloomberg, Cape Town is preparing to implement a bylaw that will raise municipal rates for short-term rental property owners by over 135% based on their market value. This change specifically targets homeowners who list their properties on platforms such as Airbnb and Booking.com.
Mayor Geordin Hill-Lewis commented on the initiative: “We are correcting the imbalance in taxes. An Airbnb is a decentralized hotel, so it has to pay the same rates and taxes a hotel does.”
Cape Town – which is hailed as Africa’s most expensive city for real estate – currently has over 25 000 Airbnb listings, with 13 000 -15 000 active bookings. This is more than double the listings found in cities like New York, Amsterdam, Hong Kong, and Barcelona. From rooms to apartments to fully furnished homes, the market is particularly popular amongst overseas tourists.
RESTRICTION ON OPERATIONS TOO?
Airbnb homeowners could not only face higher municipal rates but also restrictions on their operations.
Trafalgar Managing Director Andrew Schaefer said: “The new regulations may also restrict the total number of days a year that a property may be let on Airbnb and similar platforms.
A new city bylaw will impact short-term Airbnb rentals in Cape Town. This approach has been implemented in other cities to deter property ownership exclusively for short-term rentals and to motivate owners to transition these properties into long-term rentals, providing steady income throughout the year.
Authorities aim to tackle the issue of profitability in short-term letting, which, as housing activists argue, has contributed to the scarcity of affordable long-term rental options for local residents in Cape Town.
Adapted from www.thesouthafrican.com
