Cape Town regulators crack down on short-term rental taxes
Summary
Cape Town is cracking down on short-term rental tax loopholes, aiming to tax commercial STRs at the commercial rate instead of residential. The proposal won't affect hosts renting out rooms. Estimates show 30,000 STRs exist, with 26,000 on Airbnb. Stakeholder engagement and a national registry are in development.
Key Insights
- •Industry estimates suggest there are approximately 30,000 short-term rentals in the city, with 26,000 of those listed on Airbnb.
- •The City of Cape Town is proposing a by-law to close a tax loophole, requiring properties used primarily as commercial short-term rentals to pay municipal rates at a commercial tariff rather than a lower residential rate.
Action Items
- ✓Short-term rental owners and operators should come forward to voluntarily pay the correct commercial rates before the law is implemented.Effort: lowImpact: medium
Common Mistakes
- ⚠Failing to comply with the new tax regulations could lead to paying incorrect rates which could lead to penalties.
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