Edinburgh Council Plans to Introduce Tourist Tax for Housing and Parks Improvement

Edinburgh City Council is set to become the first in the UK to implement a comprehensive tourist tax, projected to generate between £43 million and £50 million annually. Starting in July 2026, visitors will pay a 5% surcharge on accommodation, including hotels, bed and breakfasts, and short-term rentals. The tax will be capped at seven consecutive nights and aims to alleviate the city's housing crisis, which has seen soaring rents and house prices push over 3,000 households into homelessness last year. Council leader Cammy Day emphasized that £5 million of the tax revenue will be allocated to borrow £70 million for new council housing and affordable homes. This initiative comes amid rising concerns from anti-poverty campaigners and recent Scottish government measures targeting short-term lets. The council plans to use approximately 50% of the tax income for housing and public space improvements, including parks and the renovation of the Ross bandstand in Princes Street Gardens. Additionally, 35% of the funds will support the city’s festivals and cultural venues, while 15% will be dedicated to tourism promotion. Day expressed confidence that the tax would enhance Edinburgh's appeal for both residents and visitors, countering claims from hotelier Rocco Forte, who criticized the levy as detrimental to business. The council continues to consult with the public, noting that evidence from other cities shows such taxes do not deter tourism.