Edinburgh tourist tax takes "significant step forward"
Councillors in the capital agreed key details of the draft scheme on Thursday
Last updated 22nd Aug 2024
Councillors in Edinburgh have backed the introduction of a tourist tax in the capital.
The Scottish capital will become the first city in the UK to charge a transient visitor levy similar to schemes in European cities such as Amsterdam.
The charge will be applied to visitors who come to the city and stay in hotels, B&Bs and properties let out through websites such as Airbnb.
Councillors voted to approve the move at a meeting of the policy and sustainability committee on Thursday.
A 12-week consultation period will be launched in the autumn asking residents whether the proposed 5% charge should be higher or lower.
Response to the consultation will inform the final scheme, set to be agreed in January next year.
City officials have said the proceeds will be used to pay for improvements across the capital, but critics argue the charge will be bad for businesses.
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.
"These proposals have been shaped by the views of residents, visitors and industry. We’re committed to making sure this is the best levy for Edinburgh and will begin our formal consultation as soon as the Scottish Government allow.
"This is a once in generation opportunity for Edinburgh and I look forward to the many benefits a visitor levy will bring, allowing us to reinvest tens of millions of pounds in sustaining and improving the things that make our city so special – for our visitors and residents who live here all year round.
But Leon Thompson, executive director of UKHospitality Scotland, said: "The visitor levy will increase costs for both visitors and businesses in Edinburgh, and that cost must be kept to a reasonable minimum.
"It's concerning that an even higher levy has been proposed than the 5% in the draft scheme. I would urge extreme caution against setting the levy at a level which could tip the balance towards this scheme having a detrimental impact to Edinburgh's reputation as a leading destination.
"Business costs to set up and administer the levy will be significant and it's positive that the council has so far backed a mechanism for businesses to recover their costs.
"UKHospitality Scotland will consult with members across Edinburgh during the consultation period and respond, reflecting the views of our members."
Key highlights of the draft visitor levy scheme include:
- Flat 5% charge per night: Visitors staying in accommodation will be required to pay a small, fixed fee per night of 5% of the accommodation cost, capped at seven consecutive nights.
- Wide range of accommodation: The levy will apply to paid accommodation including hotels, short-term lets, hostels and bed and breakfasts, but will exclude stays in campsites.
- Funding allocation: The levy is expected to raise £45-50 million a year by 2028/29. Revenue generated will be reinvested directly into initiatives that benefit residents and enhance visitor experiences, such as a ‘Well Kept City Fund’, affordable housing, city infrastructure, destination marketing and support for major events and festivals.
- Shaped with industry input: The draft scheme has been shaped by many years of engagement with local businesses, residents, and tourism stakeholders including hoteliers.
- Expected to launch 2026: When the draft scheme is finalised, early in the new year, the Council will begin working with partners to implement the Visitor Levy and make it live by Summer 2026.