Christina Leitner works in a bar and has been living as a digital nomad for eleven years. At the time this photo was taken, she was staying in Cape Town. (Photo by Kristin Palitza/picture alliance via Getty Images)
Cape Town residents have called on the city council to implement a “tourist tax” to be paid by digital nomads whose influx they say has led to rental and general living costs spiralling.
Digital nomads are foreigners who work for companies abroad but have opted, with the use of technology, to base themselves in their cities of choice around the world, such as Cape Town.
Authorities have previously welcomed the boost to tourism from these semi-permanent visitors, but in Cape Town, over 3 000 people have signed a petition on change.org, arguing that the rise in digital nomads has driven a gentrification of the city which is akin to “modern-day colonisation”.
“I have seen the impact of digital nomads over the past few years, besides rent drastically increasing and the general housing crisis, living and spending time in the CBD has become overly expensive,” Michael van Niekerk, who initiated the petition, told the Mail & Guardian.
Data collected by the National Low Income Housing Coalition through estate agents in Cape Town shows that these remote workers are willing to pay between R25 000 and R30 000 a month in rent for a one-bedroomed apartment. The median monthly salary earned by many locals is R5 500, meaning such housing is unaffordable for them.
Many owners are also choosing to advertise their properties for short-term rentals on platforms like Airbnb, reducing the availability of long-term housing options for locals. As of December 2024, Cape Town had over 25 800 active short-term rental listings, surpassing cities like Florence and Berlin.
In Cape Town’s historic Bo-Kaap neighbourhood, known for its vibrant, candy-coloured houses, residents are worried about gentrification driven by tourism and foreign property investments.
They say the influx of digital nomads and tourists has led to an increase in property prices, which threatens to displace long-standing communities.
“Please go away. You are making Cape Town expensive for South Africans,” one social media user posted.
“Our rental prices have increased drastically – we can barely afford the living expenses — because the city has made Cape Town a tourist destination rather than focusing on the residents,” another resident posted on TikTok.
Cape Town authorities are considering regulatory measures including adjustments to the city’s rates policy. Mayor Geordin Hill-Lewis has proposed reclassifying properties used for permanent short-term rentals from residential to commercial tax rates to ensure a equitable economic environment.
“To promote fairness in the accommodation industry, the city is working to ensure that people operating a short-term letting business (as the primary use of a property) are paying commercial, rather than residential, rates to the city,” the mayoral committee member for economic growth James Vos told the M&G.
He said the initiative aimed to create a level playing field between traditional accommodation providers and short-term rental operators.
Van Niekerk, however, wants the national government to implement a tourist tax because “residents shouldn’t have to pay the same price as tourists who enter the country with strong currencies like euros or dollars”.
The country introduced a digital nomad visa in October 2024 which requires such visitors to register with the revenue service and pay South African tax on their earnings.
The visa allows foreigners to live and work remotely in the country for up to 36 months, provided they have a minimum gross income equivalent to R650 976 and demonstrate that they are employed by a company outside South Africa.
Tourism plays a pivotal role in Cape Town’s economy and has historically directly contributed between 2% and 3.5% annually, creating approximately 45 000 direct jobs and supporting around 150 000 jobs indirectly.
In 2019, the World Travel & Tourism Council reported that the travel and tourism sector contributed over $2.5 billion to the city’s economy. The Covid-19 pandemic led to a downturn, with the sector’s contribution decreasing to $1.8 billion in 2022.
Recent data from Statistics South Africa shows that the country’s tourism sector is experiencing a steady recovery, with international arrivals reaching 8.92 million in 2024 — a 5.1% increase from the previous year. The majority of these visitors were from Africa, accounting for 76% of global arrivals between January and December 2024.
Although the sector has yet to fully recover to pre-pandemic levels, it now contributes 8.8% to national gross domestic product and supports 1.68 million jobs, according to council estimates.
Projections by global intelligence platform Statista indicate that, by 2026, Cape Town’s direct tourism contribution to South Africa’s GDP could reach $3.7 billion.
But social media influencers have called out city officials for making Cape Town “attractive to tourists but not its locals”.
In response, Vos said such criticism “tends to focus on calling for government to manipulate the demand-side of the economy while forgetting the fundamental importance of increasing affordable housing supply and creating the enabling environment for the market to meet demand for more housing supply”.
The challenges Cape Town faces are not unique. In Lisbon, Portugal, rental prices have surged by 30% over the past five years, leading to mass protests against the influx of digital nomads and tourists.
Similarly, Mexico City has experienced tension, with locals attributing rising living costs to the growing number of remote workers. Both cities have implemented measures to regulate short-term rentals and mitigate the impact on local housing markets.
A new study by financial services provider Nebeus ranks South Africa as the fourth most popular destination for digital nomads for its affordability, modern amenities and picturesque landscapes.
It says other popular destinations identified by digital nomads are Thailand, Malaysia, Argentina, Japan, Mexico, Hungary, the Philippines, Greece and Poland.
