Edinburgh City Council is set to implement a “tourist tax”, which could generate nearly £130m over the next five years.
Members of the authority have approved plans to introduce a visitor levy in Edinburgh, which will impose a flat 5% charge per night on tourists staying in the city’s accommodations, capped at seven consecutive nights.
Expected to launch in the summer of 2026, the levy will apply to a range of paid accommodation including hotels, short-term lets, hostels and bed and breakfasts. However, stays in campsites will be exempt from the charge.
According to council documents, the 5% levy is expected to raise £30-£34m in the 2026/27 fiscal year, £43-£46m in 2027/28, and £45-£50m in 2028/29.
Edinburgh stated that 45% of the revenue from the levy is expected to be collected during the summer period, from June to September.
“It [the levy] will significantly increase our ability to invest in the visitor experience and the tourism pressures we face, from keeping the city clean to responding to our housing emergency, so that everyone can continue to enjoy all that the city has to offer,” Cammy Day, Edinburgh City Council’s leader, said about the proposed levy.
This initiative comes as Edinburgh City Council reported this month that it faced a £110m funding gap over the next five years.
Reinvestment into the city
Authority documents outlined that the funding generated from the levy will be invested in two areas: cultural organisations and cultural infrastructure.
Within cultural organisations, the finance will be invested in three investment funds: Community 365, prioritising community-based organisations, Strategic Partners and Festival Support, and A Cultural Philanthropy Trust, a public/private/voluntary partnership.
Investment in cultural infrastructure will have three initial priorities: heritage assets, retrofitting, and transformation of the city’s cultural offer.
“The key principle for the implementation of the visitor levy remains that the money collected and then distributed should be additional to existing council resources and not replacement funds and be used to finance projects that primarily support the tourism sector.
“We welcome the three potential funding pots which, if used appropriately, will have a significant impact on how our city looks, and how we can support our crucial heritage and arts/event sectors,” said Roddy Smith, chief executive of Essential Edinburgh.
Edinburgh City Council has launched a formal 12-week public consultation on the levy plans, which will inform the final scheme set to be agreed upon in January 2025.
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