Edinburgh is set to implement a visitor levy on overnight stays, marking the first city-wide mandatory scheme of its kind in the UK. The charge will apply to hotels, short-term rentals, and campsites, with a phased introduction beginning in May.
Stays booked from 1 May for dates after 24 July 2026 will include the levy, which amounts to 5% plus VAT. The initiative, often referred to as a “tourist tax,” aims to address the challenges posed by high volumes of tourism. Officials estimate it could generate up to £50 million annually, funding improvements in social housing, public parks, tourism infrastructure, and cultural events.
City leaders have emphasized the importance of a long lead-in period to ensure visitors and accommodation providers are well-informed. This will allow sufficient time for hotels, booking platforms, and other providers to advertise the surcharge clearly.
The final decision on the levy is expected to be approved by councillors later this week (Friday January 10), concluding a process that began more than six years ago.
Council leader Jane Meagher hailed the proposal as a transformative opportunity for the city. “This is the culmination of years of effort – a chance to ensure Edinburgh remains one of the world’s most attractive and vibrant destinations. The funds raised through this initiative could represent the largest single investment in the city this millennium,” she said.
The levy aims to balance the benefits of tourism with sustainable development, helping Edinburgh manage its popularity as a global destination while enhancing the quality of life for its residents.
UKHospitality Scotland has reiterated its stance that levy costs must be kept to a minimum and that the inclusion of a cost recovery mechanism for businesses was essential.
Leon Thompson, Executive Director of UKHospitality Scotland, said:
“It’s crucial that the Visitor Levy was not raised above the proposed rate of 5% and it’s positive that the Council has listened to strong feedback from hospitality businesses on this point.
“Retaining a mechanism for business cost recovery, as called for by UKHospitality Scotland, was essential and I’m pleased that this remains within the revised scheme.
“The proposal to apply the levy to eligible bookings from May this year is a quick turnaround for businesses, who will have to implement new systems and ways of working in just over three months. To make this achievable, the Council will have to work at pace to urgently provide clear and detailed guidance for businesses tasked with collecting levy funds.
“Ahead of the Council vote later this month, I would urge councillors to understand that the rate cannot be punitive and to be mindful of the impact any additional costs will have on businesses and visitors.
“UKHospitality Scotland will continue to work with the Council on behalf of the sector to ensure this scheme is introduced as simply as possible for businesses and visitors.”
