Edinburgh set to be first city in Scotland to implement tourist tax

Edinburgh is set to become the first city in Scotland to implement a tourist tax, with profits to fund improvements to the capital.

Councillors in the Scottish capital will introduce proposals to charge a transient visitor levy similar to schemes in cities such as Amsterdam, Berlin and New York.

Visitors who come to the city and stay in hotels, B&Bs, and properties let through websites such as Airbnb will be charged 5% of the cost of the accommodation.

The scheme covers the entirety of the City of Edinburgh Council area and will apply to overnight stays from July 24, 2026, or booked and paid-for visits on or after May 1, 2025.

The scheme’s aim is to sustain Edinburgh’s status as one of the “world’s greatest culture and heritage cities,” and funds generated from the tax will be used to improve public spaces.

However, opponents to the levy said it would deter visitors to the city and risk harming Edinburgh’s appeal as a tourist destination.

The confirmation of the levy comes after the city’s council launched a formal 12-week public consultation on the draft on September 20, with residents asked whether the 5% charge tabled in the initial proposal should be higher or lower.

Following the survey, which received 4,517 responses, the majority of respondents agreed with the levy’s objectives, and there was “strong support” for a 5% levy rate.

However, over a third of visitors and two in ten businesses did not support introducing the levy.

Recommendations for the scheme include capping the levy at five consecutive nights per person.

Ex-Edinburgh council leader Cammy Day previously said the tax could raise £50m a year for the city, which welcomed 1.8m visitors in 2022.

It was claimed the charge could raise up to £50m a year for the council which would “present a welcome and innovative way of sustaining” the city’s tourism sector.

A tourist tax has also been discussed by councils in Glasgow, Stirling and the Highlands after the Visitor Levy (Scotland) Act 2024 was passed by the Scottish Parliament in May.

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “Given the importance of the tourist economy to the capital, Edinburgh Council cannot afford to be reckless with these plans. The implementation of short-term let licensing was a policy shambles and we cannot have history repeating itself with the visitor levy.

“Many simply don’t realise that this tax won’t just be paid by international visitors but by ordinary Scots staying in the city – be it for business purposes, seeing friends, visiting family in hospital, or taking in the Fringe.

“Other European cities might have it, but they often charge a small flat rate, don’t charge their own residents, and don’t have a 20% VAT rate. The schemes are not comparable. There is a real risk of undermining Edinburgh’s position as a leading destination.

“This policy will also disproportionately impact small local accommodation businesses, including self-catering and B&Bs, further increasing the administrative burden. The accumulative regulatory impact could cripple them at a time when recovery is precarious.

“We also fear that the transitional period is too short. The Council still has a lot of work to do to reassure business that these plans won’t erode the very industry it is supposedly meant to support.”