Local politicians in Edinburgh have approved a tourist tax on overnight stays, making it the first city in the United Kingdom to implement such a levy.
Beginning in mid-2026, visitors staying in hotels, bed-and-breakfasts, hostels, self-catering apartments, or guest houses will be charged a fee equivalent to 5% of their accommodation cost per night. The tax will be capped at five consecutive nights, according to the City of Edinburgh Council.
Accommodation providers will collect the levy on behalf of the local authority. Jane Meagher, head of the council, said tourism places a significant strain on the city’s resources, and the new tax will help fund sustainable development.
“Tourism puts strain on the city’s resources, and 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,” Meagher said in a statement.
In 2023, Edinburgh welcomed nearly 5 million overnight visitors who spent £2.2 billion ($2.7 billion), according to Visit Scotland. Officials estimate the levy could generate £45-50 million ($56-62 million) annually by 2028 or 2029.
The tax has been under discussion since 2018 but became feasible after the Visitor Levy (Scotland) Act passed in July. Revenue from the levy must be used to support local facilities and services heavily utilized by visitors.
During consultations, just over half of residents and businesses supported the 5% charge, but 62% of visitors either opposed the tax or believed it should be lower, according to council reports. Initially capped at seven nights, the charge was reduced to five after feedback from Visit Scotland and Edinburgh Festivals, which noted that many performers and workers stay in the city for extended periods.
Some councillors advocated for a higher levy and called for the funds to address Edinburgh’s housing crisis, particularly in providing affordable housing for hospitality workers.
Edinburgh joins a growing list of European cities implementing tourist taxes. Amsterdam has one of the highest levies, charging 12.5% on hotel stays and additional fees for cruise passengers. Venice introduced an entrance fee for day-trippers in a pilot program last year, which raised millions of euros.
The Welsh government also plans to propose similar legislation, potentially making tourism levies more common across the UK.