The City of Edinburgh Council is introducing a new tourist levy, a move set to further reshape the landscape for short-term lets across the city.

 

IMPACT ON SHORT-TERM LETS

For short-term let operators in Edinburgh, the introduction of the tourist levy raises several important considerations:

  1. Increased Costs for Guests – The levy will be added to the cost of accommodation, meaning that visitors booking short-term rentals through platforms like Airbnb or Vrbo will need to pay an additional charge per night. This could make Edinburgh a slightly more expensive destination, particularly for budget-conscious travellers who may opt to visit elsewhere, which would affect demand for accommodation in the city
  2. Administrative Burden on Hosts – Short-term let hosts will need to ensure compliance with the new regulations, likely collecting and remitting the levy on behalf of their guests, meaning extra paperwork or integration with booking platforms to automate the process. Some hosts may need to increase their prices to offset the administrative burden, potentially making them less competitive compared to larger hospitality businesses.

 

WHAT SHOULD SHORT-TERM LET HOSTS DO AT THIS POINT?

With the tourist levy on the horizon, short-term let hosts in Edinburgh should start preparing now by staying informed

  • Keep an eye on updates from the City of Edinburgh Council to understand how and when the levy will be implemented.
  • Consider how the levy might impact demand and whether minor pricing adjustments could help offset the costs without deterring bookings.
  • Keep up to date with how booking platforms will handle the levy collection and explore tools that can help simplify reporting and remittance.

The introduction of a tourist levy in Edinburgh marks another regulatory change for short-term lets, following the recent licensing requirements. While the levy is designed to support local services and manage the impact of tourism, it adds another layer of complexity for short-term rental operators in the city. By staying proactive and adapting to these changes, hosts can continue to offer great experiences while remaining compliant with new regulations.

 

WHAT IS THE TOURIST LEVY?

The tourist levy, or visitor levy, is a charge that the City of Edinburgh Council will impose on overnight stays. Similar to city taxes in destinations like Barcelona and Amsterdam, the levy is designed to generate additional revenue for local services and infrastructure that are impacted by high visitor numbers. As Scotland’s most visited city, Edinburgh is the first to implement such a policy.

 

HOW WILL THE LEVY WORK?

The proposed visitor levy in Edinburgh is structured as follows:

  • Levy Rate: A 5% charge on the cost of paid overnight accommodation, calculated before VAT and excluding extras like parking, meals, or transport.
  • Duration: The levy applies to the first five consecutive nights of a stay.
  • Applicability: It covers various types of paid accommodation, including hotels, self-catering apartments, bed and breakfasts, guest houses, hostels, holiday/short-term lets, and even certain vehicles or boats that remain stationary.
  • 2% Reimbursement: 2% of the levy funds collected will be reimbursed to accommodation providers to cover some of the direct costs which occur as a result of collecting the levy

 

TRANSITIONAL PERIOD AND IMPLEMENTATION TIMELINE

An 18-month period will be allocated for preparation and implementation, as mandated by the Visitor Levy Act.

  • Pre-Bookings Subject to Levy: All bookings taken from 1 October 2025, pre-booked stays that occur after the levy comes into effect (i.e. for stays after 24 July 2026) will be subject to the charge.
  • Full Implementation: The levy will apply to all paid overnight stays from 24 July 2026 onwards.

This transition period allows businesses to adapt their pricing, update booking systems, and ensure compliance with the new requirements before the levy takes full effect.

If you’re a short term let host, unsure of what to do next, contact our experienced new client advisor team to will explain more about switching to long term lets and answer any questions you have. With long term rents having climbed over 30% in the past 5 years, long term letting may be more lucrative than you thought, and with much less of the hassle.