Edinburgh to introduce Scotland's first ‘tourist tax’

Edinburgh is to introduce Scotland’s first ever visitor levy, adding a 5% tax to overnight hotel stays.

The fee, agreed by councillors in a virtual meeting, is expected to raise up to £50m a year to reinvest in the city.

Businesses will need to apply the levy to any advance bookings made from 1 October 2025 for stays on or after 24 July 2026.

The charge will cover hotels, B&Bs, self-catering accommodation and short-term rental accommodation, such as Airbnbs, in Edinburgh.

Councillors have voted to delay the start of the transition period for the tax, which was originally due to begin in May.

It will now apply to overnight stays from 24 July 2026, which are booked and paid for on or after 1 October 2025.

UKHospitality Scotland has urged the council to continue working closely with businesses to ensure there is support for operators throughout the period.

Leon Thompson, executive director of UKHospitality Scotland, said: “Not only has Edinburgh’s visitor levy been confirmed, but so too has the hit to the city’s competitiveness as a leading tourist destination.

“Our fundamental concern has always been that this levy will only serve to make visitors trips to Edinburgh more expensive, ultimately reducing their spending in the wider visitor economy and deterring future visits.”

He added: “It’s now the job of the council to use these funds wisely to improve the capital’s attractiveness as a visitor destination and mitigate the impact of the levy on businesses.

“As we now head towards July next year when the levy comes into force, I look forward to working closely with the council, as part of the partnership approach it has taken so far, to help make the scheme work as best as possible for hospitality and tourism.”

In 2023, Manchester became the first UK city to impose a £1 visitor charge on overnight stays in city-centre hotels or holiday apartments.

The Welsh government is also considering introducing a £1.25 per night tourism charge from 2027.