Edinburgh votes through £50m tourist tax as start date revealed

Edinburgh will become the first city in Scotland to get a tourist tax after the levy was voted through by councillors, as opponents warned the move risked putting off visitors.

The city council has long-championed the visitor levy but progress has been slow after the Scottish Government put legislation to hand over powers to local authorities on hold during the pandemic and the aftermath of the crisis as businesses tried to recover.

Council bosses in the capital have pointed to other destinations across Europe that have introduced a charge, with the plans for Edinburgh potentially generating up to £50 million of “new money” for the crash-strapped local authority.

Under the plans, hoped to be rolled out in time for the 2026, festival season, visitors would face a 5 per cent charge - making Edinburgh the first place in Scotland to charge a transient visitor levy (TVL) on overnight stays.

Anyone staying in rooms in hotels, B&Bs, self-catering accommodation, and those let through websites such as Airbnb would be charged the tourist tax.

Edinburgh residents will be asked whether the 5 per cent charge included in the initial proposal should be higher or lower as part of a 12-week consultation to start in the autumn. The Scottish Greens have proposed raising the tax to as high as 8 per cent.

A council report said the up to £50m generated from the charge would be used to tidy up streets and parks, build more affordable homes and install underground bins.

The authority said it felt a 5 per cent charge on visitors’ accommodation costs, capped at seven nights, would bring in “enough to be worth it” without it having a “detrimental impact on the competitiveness of Edinburgh’s tourism offer”.

The report considered by councillors on Thursday outlined how the money could be spent within the limits of the legislation, which states it must support “developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting the scheme area for leisure or business purposes”.

But political opponents have warned the charge could harm the economy in the capital and result in visitors shunning Edinburgh.

Scottish Conservative Lothians MSP Miles Briggs, said: “It is deeply disappointing that Labour-led Edinburgh Council have voted to introduce this harmful tourist tax. 

“Only last month did the owner of the capital’s Balmoral Hotel warn it would be bad for jobs and bad for economic growth, but they have failed to heed his stark warnings.“

He added: “At a time when tourism businesses are already facing a huge tax burden, this is another bitter blow for them. 

“This new levy could well put off visitors coming to Edinburgh – which would be deeply damaging for our economy – and the Scottish Conservatives continue to oppose it.” Marc Crothall, chief executive of the Scottish Tourism Alliance, had earlier this month told The Scotsman there was a “complete lack of awareness” surrounding the incoming tourist tax that would apply not just to those visiting from overseas, but also to Scots staying closer to home.

He said: “The perception is that the so-called tourist tax only applies to a tourist, but the transient visitor levy that is being applied in Scotland applies to anyone, a tourist or not, who is staying in overnight accommodation.

“A tourist tax in other countries is sometimes a direct tax on someone who is coming inbound into the country.

“I think a lot of people in Scotland don’t realise the distinction. The example I use is that, say if you have a fall out with your partner and you have to go to stay a night in a hotel until things have settled down, and in that area the local authority has decided to impose a transient visitor levy, you would have to pay it. So you are not a tourist, in that sense.”

But Neil Ellis, chairman of the Edinburgh Hotels Association, welcomed the introduction of the levy.

He added: “This is a fantastic opportunity to further enhance Edinburgh’s reputation on the world stage as a must-visit destination.”

Labour council leader, Cammy Day, said: “We can’t take Edinburgh’s incredible cultural offering and reputation as a fantastic place to visit for granted, and a visitor levy presents an innovative way of sustaining the sector and the city.

“It will significantly increase our ability to invest in the visitor experience and the tourism pressures we face, from keeping the city clean to responding to our housing emergency, so that everyone can continue to enjoy all that the city has to offer.

“By better supporting these services we can secure Edinburgh’s future as a top global destination.”