On 24 January 2025, Edinburgh City Council voted to implement a visitor’s levy, or “tourist tax.” This tax follows the lead of other major European tourist destinations like Paris and Barcelona, making Edinburgh the first UK city to introduce the policy.
The new levy, whose details were first agreed to in August of last year, will see a 5 per cent tax effect “paid accommodation including hotels, short-term lets, hostels and bed and breakfasts, but will exclude stays in campsites” according to the Council website.
The details of this policy were informed by a series of consultations last year with the Scottish government and the public, as well as an impact assessment with local businesses.
The findings of said reports showed that a tax on overnight tourism would not only mitigate the negative effects of tourism on local housing, but also generate an extra £50m per year for local infrastructure.
Despite a flat rate charge of 5 per cent being previously agreed, opposing parties attempted to alter the details of the levy a week before the vote.
Although the Scottish National Party (SNP) agreed to the levy, they motioned to change its structure, instead setting a flat rate of 7 per cent taxation, ending after a 7th consecutive night.
Additionally, they requested that funds gained from the levy should not be reallocated into public infrastructure in a blanket manner, but instead prioritise communities in greater need of reinvestment.
Similarly, The Green Party generally agreed with the policy’s condition, although they pushed for the tourist tax rate to be set at 8 per cent instead.
The SNP also agreed to back Labour’s plan on the day of the vote, with the condition that £20m of the £50m generated per year would be reallocated into affordable housing. However, Labour declined this deal.
The final plans settled on by Labour councillor, Jane Meagher, will see a 5 per cent levy introduced. The new tax is set to come into action in July of 2026.
“Edinburgh Castle” by Craigyc is licensed under CC BY 2.0.