Edinburgh tourist tax: Final proposals tweaked after consultation

And the new charge - 5 per cent of the cost of overnight accommodation - will come into effect from July 24, 2026, making Edinburgh the first place in Scotland to use the new legislation allowing councils to introduce a visitor levy (VL).

The council said the 12-week consultation, which ended last month, found broad support for both the way the scheme will operate and how the money raised should be spent.

Visitors to Edinburgh face a 5 per cent levy on overnight accommodation from July 24, 2026

But details have been tweaked in response to comments made. The levy will now be payable only for the first five consecutive nights of any stay rather than the first seven. And a plan to exempt campsites has been dropped.

The council estimates the levy will bring in an extra £100 million to the city’s coffers over the first three years and then £50m a year once it is established.

The legislation requires the money to be spent to support, develop or sustain the visitor economy. But official guidance makes clear that includes initiatives which benefit visitors either directly or indirectly.

Edinburgh’s plans include using £5m a year to borrow around £70m to build new affordable homes to help tackle the housing emergency. Two per cent of the revenue would be allocated for “participatory budgeting” where local communities can decide which projects to fund.

And the remainder of the funds would be divided, with 55 per cent going to city operations and infrastructure, from street cleaning and improved lighting to sett replacement and pedestrianisation; 35 per cent for the local arts and culture sector; and 10 per cent would fund tourism marketing for the city.

Edinburgh has long campaigned for a tourist tax in recognition of the extra costs and challenges the city faces as a prime visitor destination. And council leader Jane Meagher said the imminent prospect of the final plan being approved and implemented was “extremely exciting”.

She said: “This is the moment we have been working towards - a once-in-a-lifetime opportunity to sustain and enhance Edinburgh’s position as one of the most beautiful, enjoyable destinations in the world.

“With income of up to £50m expected once it is established, the funding could provide Edinburgh with the single biggest injection of new funding this side of the millennium, providing a unique opportunity to further improve and protect all that makes Edinburgh the incredible destination it is today.

“We’ll be able to use funds to help us manage tourism sustainably and boost projects which benefit the experience of visitors and residents. I’m looking forward to working with councillors to agree the scheme this month, which will allow further work to be carried out on the details of Edinburgh’s new levy.”

Although the VL will not come into effect until summer 2026, the charge will start being applied to bookings made from May 1 this year for overnight stays on and after July 24, 2026.

And the final scheme includes admin support for accommodation providers: equalling 2 per cent of visitor levy income, expected to be cost around £900,000. That is in addition to the council’s own running costs for the levy of £1m a year and initial set-up costs of £800,000.

There were a total of 4,517 responses to the online consultation on the scheme. The council said a majority of respondents agreed with the objectives of the levy and there was strong support for the 5 per cent rate, but more than a third of visitors and 20 per cent of businesses did not support the levy being introduced.

Residents were more likely to support spending on housing and infrastructure, while visitors were more supportive of money being used for culture, heritage and events.

Details of the projects to be funded by the levy will be agreed by the relevant council committees in the months ahead. And an independent chair is to be recruited for the Visitor Levy Forum, to be made up of residents, tourism providers, tourism organisations and others, which will make recommendations to the committees on the spending plans.

Cllr Meagher said: “The visitor levy is extremely exciting and very welcome, with potentially huge benefits for the city, not only for visitors, but also for residents. It’s not a silver bullet for some of the problems we face in the city, but it will enhance the visitor experience considerably.”

The updated VL proposals will be considered by the policy and sustainability committee on Friday, January 17 and by a special full council meeting on Friday, January 24.