Edinburgh Sets Precedent with UK’s First Overnight Tourism Tax
The Scottish capital city of Edinburgh is set to make history by becoming the first city in the United Kingdom to implement a tourist tax for overnight stays.
Starting in mid-2026, visitors to Edinburgh will need to pay a fee for every overnight stay, a decision expected to generate millions annually for local reinvestment.
The tax, approved by Edinburgh City Council, will apply to all types of accommodations, including hotels, hostels, bed and breakfasts, guest houses, and short-term rentals.
Visitors will be charged 5% of their nightly accommodation cost, capped at five consecutive nights, a structure designed to minimise the impact on longer-term visitors, such as festival performers and workers. Accommodation providers will be responsible for collecting the tax on behalf of local authorities.
Jane Meagher, head of the City of Edinburgh Council, emphasised the importance of the levy, highlighting the strain that tourism places on the city’s resources.
“This is a once-in-a-lifetime opportunity to invest tens of millions of pounds towards enhancing and sustaining the things that make our city such a great place to visit—and live in—all year round.”
Tourism is a key driver of Edinburgh’s economy.
In 2023 alone, nearly 5 million visitors spent a staggering £2.2 billion in the city, according to Visit Scotland. The council estimates the new tax could generate between £45–£50 million annually by the end of the decade, funds that will be reinvested into local facilities and services heavily used by tourists.
Balancing Benefits and Concerns
While the tourist tax is poised to bring significant financial benefits, the path to approval wasn’t without debate.
Some council members advocated for a higher charge, citing the need for additional revenue to tackle issues like affordable housing. Workers in Edinburgh’s hospitality sector, many of whom struggle with the city’s high housing costs, were a particular focus of this discussion.
Public opinion was split. A council survey revealed that over half of local residents and businesses supported the 5% levy, but 62% of tourists either opposed the tax outright or suggested a lower rate. The council eventually reduced the cap from seven nights to five after concerns were raised by Visit Scotland and Edinburgh Festivals about the impact on long-term visitors during the city’s world-renowned festivals.
The Bigger Picture
Edinburgh’s move aligns with a broader global trend of cities introducing tourist levies to manage tourism's impact. Elsewhere in the UK, Wales is preparing to roll out its visitor tax later this year.
Across Europe, similar measures have proven successful. Venice recently piloted an entrance fee for day-trippers, raising millions of euros to support its infrastructure. Amsterdam, a pioneer in tourist taxes, now charges one of Europe’s highest rates, with a 12.5% levy included in hotel bookings.
The concept of a tourist tax in Edinburgh has been years in the making. First proposed in 2018, the plan only became feasible with the introduction of Scotland’s Visitor Levy Act in July 2024. This law mandates that all revenue collected from such levies be reinvested in local communities, ensuring the funds directly benefit the areas most affected by tourism.
As Edinburgh prepares to implement its tourist tax, many will be watching closely to see how the policy impacts the city’s tourism industry, its infrastructure, and its residents.
With similar initiatives gaining momentum worldwide, Edinburgh’s trailblazing move could set a precedent for how other cities in the UK address the challenges and opportunities of modern tourism.
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