Edinburgh tourist tax: When the tax will start and how much it will be, as consultation launched

Councillors are being warned a tourist tax could have a “detrimental impact” on Edinburgh’s reputation as a top holiday destination.

But Edinburgh City Council argues it is a “once-in-a-lifetime chance” to raise hundreds of thousands of pounds to help improve the city. The council has officially launched a public consultation on the idea and is now asking residents and visitors to share their thoughts.

A public consultation on introducing an Edinburgh tourist tax has opened. Image: William Burdett-Coutts.

A tourist tax would see a 5 per cent charge added to all overnight stays in the capital, which could raise over £100 million in revenue by 2030. But the Association of Scottish Self-Caterers warns the move could risk damaging Edinburgh’s tourism industry.

Fiona Campbell, chief executive of the association, said: “It is not just operators or overseas visitors who will be impacted, but ordinary Scots choosing to visit Edinburgh will be hit in the pocket too.

“The introduction of this levy runs the risk of damaging the competitiveness of our tourism market and price sensitive consumers may switch to cheaper destinations elsewhere in the UK or abroad.”

Fiona Campbell is chief executive of the Association of Scottish Self-Caterers.

Ms Campbell said she was worried the tourist tax could “cripple” smaller businesses,. She said: “We would urge extreme caution against setting the levy at a level that could tip the balance towards this scheme having a detrimental impact to Edinburgh’s reputation as a leading destination.”

What will be decided from the consultation?

In the consultation, members of the public are asked whether the levy should be higher or lower than the proposed 5 per cent. Should the tax be introduced, the rate would be fixed throughout the year and charged for the first seven nights only.

What would the tourist tax be used for?

The council says it would spend £5m of the money generated each year to borrow £150m, which they would then spend on building social housing. The move would free up hotel and B&B beds being used to house homeless people, the local authority has said.

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The council would then spend 55 per cent of the income generated on “city operations and infrastructure”. This includes work such as emptying bins, cleaning public toilets, graffiti removal, park maintenance, and CCTV and street lights, as well as larger projects improving how tourists get about the city.

A further 35 per cent would be spent on culture, heritage and events, 10 per cent on visitor management, and 2 per cent on participatory budgeting - when local groups decide how funding is invested in their local communities.

What does Edinburgh council say about the tourist tax?

Edinburgh Council says other major cities worldwide have a tourist tax, including Amsterdam, Paris, Rome, Barcelona, New York, Kyoto and Dubai.

Council leader Cammy Day said: “With the potential to raise tens of millions of pounds a year once it’s established, a visitor levy for Edinburgh presents a huge opportunity for us to invest sustainably in maintaining and developing the things that make our city such a great place to visit - and live in - all year round.

Edinburgh City Council leader Cammy Day at the City Chambers

“This is a once-in-a-lifetime chance for our city to harness its global visitor appeal.

“Funds raised could go towards supporting vital services such as keeping the city clean and green, preserving some of our incredible heritage sites as well as supporting businesses in the visitor economy industry.”

The public consultation closes on December 15. Councillors will decide early next year whether to introduce the tax. If agreed, the levy would come into force on July 24, 2026.