Edinburgh tourists to pay a lodging tax from 2026

Edinburgh is expected to become the first city in Scotland to introduce a tourist tax. The decision to introduce the levy, called the "Transient Visitor Levy," has been approved by the city council and is scheduled to take effect on 24 July 2026. The tax will apply to stays in hotels, hostels, guesthouses, and accommodation booked through platforms such as Airbnb.

The tax will be set at 5% of the nightly accommodation cost, capped at a maximum of seven consecutive nights. The measure is expected to raise up to £50 million (€59 million) a year by 2029.

Where the levy revenue will go

The funds will go toward developing city infrastructure, building affordable housing, cultural events, and supporting heritage and tourism management. 35% of the funds raised is planned to be allocated to supporting the arts.

To help businesses adapt to the new conditions, a transition period has been proposed. The tourist levy will only apply to bookings made after 1 May 2025, for stays after 24 July 2026.

Business reaction and future outlook

Some representatives of the tourism industry have expressed concern that the new tax could reduce Edinburgh's appeal as a tourist destination. Marc Crothall, head of the Scottish Tourism Alliance, said he is particularly concerned about the measure's impact on domestic tourism, which is already grappling with the effects of the cost-of-living crisis in the UK. However, council leader Cammy Day believes a levy of a few pounds is unlikely to deter travellers.

Edinburgh is not the only region in Scotland considering a tourist tax. Highland Council is also exploring introducing a levy calculated as a percentage of the nightly accommodation cost. The Highlands region welcomes more than six million tourists a year, including cruise passengers and day-trippers. In 2019, local authorities already discussed introducing a similar tax, which could raise up to £10 million (€12 million) a year for infrastructure improvements.

This initiative puts Edinburgh alongside other popular European cities, such as Amsterdam, which already applies a 12.5% tourist levy, and Berlin. In this way, Scottish authorities hope to ensure sustainable development of tourist regions and fairly distribute the burden on infrastructure.