Scotland to introduce tourist tax by 2026

Edinburgh is set to become the first Scottish city to implement a tourist tax, following significant progress by the City of Edinburgh Council on a draft scheme.

If the plan goes ahead, the levy could be in place by the summer of 2026, bringing Edinburgh in line with other major tourist destinations such as Venice, Barcelona, Amsterdam, New York and Manchester.

The proposed tourist tax, officially termed a “visitor levy,” is expected to generate substantial revenue for the city, with estimates suggesting it could bring in up to £50 million (€58.8 million) annually by 2028/29.

This income will be reinvested into various public services, infrastructure and cultural preservation efforts, ensuring that Edinburgh remains a vibrant and sustainable city for both residents and visitors.

Key details of the Scottish tourist tax

The visitor levy will apply to a broad range of paid accommodations, including hotels, short-term rentals, hostels and B&Bs, while stays at campsites will be exempt.

The council’s draft proposal suggests a flat 5% charge per night on the cost of accommodation, capped at a maximum of seven consecutive nights.

However, a three-month public consultation will soon be launched to gather feedback from residents, tourists and businesses, with the possibility of adjusting the rate based on the input received.

Final decisions on the scheme are expected by January 2025, allowing for an 18-month preparation period before the tax is officially introduced.

What impact will the tourist tax have on the Scottish economy and culture?

City of Edinburgh Council Leader Cammy Day emphasised the benefits of the levy, calling it an “innovative way of sustaining the sector and the city.”

The revenue generated is earmarked for enhancing the visitor experience, addressing tourism pressures, maintaining the city’s cleanliness and tackling the housing crisis.

Additionally, funds will support the preservation of Edinburgh’s rich cultural heritage, including its globally renowned festivals.

“This levy will significantly bolster our ability to invest in the visitor experience and manage the challenges posed by tourism,” Day said. “By enhancing these services, we can secure Edinburgh’s future as a leading global destination.”

Concerns about the Scottish tourist tax

Despite the potential benefits, the proposed levy has faced some pushback from the hospitality industry. UKHospitality Scotland has raised concerns about the economic impact on businesses, especially given the suggestion of a higher-than-expected rate.

Leon Thompson, Executive Director of UKHospitality Scotland, urged caution, warning that setting the levy too high could harm Edinburgh’s reputation as a top-tier tourist destination.

“The costs for businesses to set up and administer the levy will be significant,” Thompson said, highlighting the importance of keeping the charge at a “reasonable minimum.”

The council has acknowledged these concerns and has proposed mechanisms to help businesses recover the costs associated with implementing the levy.

As the consultation period approaches, stakeholders across Edinburgh are encouraged to participate in shaping the final details of the visitor levy. The outcome of this process will determine how the city balances its need for sustainable tourism funding with the economic realities faced by its hospitality sector.

With the potential to set a precedent for other Scottish cities, Edinburgh’s move towards a tourist tax is being closely watched by both supporters and critics. Whether the city can successfully implement this levy while maintaining its appeal to global visitors remains a key question as the proposal advances.