Hailed as a “historic moment for Edinburgh”, the decision was taken during a special meeting of the council held online on Friday.

From 24 July 2026, a 5% fee will be applied to the cost of overnight accommodation in Edinburgh, capped at five nights in a row. Businesses will need to apply the levy to any advance bookings made as of 1 October 2025 for stays on or after 24 July 2026.

The levy is projected to raise up to £50 million a year once established, for the city to invest in protecting, supporting and enhancing Edinburgh’s worldwide appeal as a place to live and visit. The final proposals for the scheme have been updated to provide accommodation providers and booking agencies with extra time to prepare systems for advance bookings ahead of next summer’s launch.

Responding to the decision, council leader Jane Meagher, said: “What an historic moment for Edinburgh. Introducing this ground-breaking visitor levy means realising a once-in-a-lifetime opportunity to invest tens of millions of pounds towards enhancing and sustaining the things that make our city such a great place to visit – and live in – all year round.

“The scheme has been many years in the making and I’m grateful to council officers, businesses and residents who have helped shape it, every step of the way. Its introduction is declared today with a huge amount of backing, not least from local residents.

“At all stages, we’ve listened to and taken account of the views of industry and other stakeholders. It’s in this spirit that we’ve also extended the amount of time hoteliers and small businesses will have to prepare for the changes that are coming in.

“It’s vital that we continue to work closely as we get ready to launch this scheme and deliver the many benefits it is going to bring. We’ve always said this is a city fund and spending decisions need to be taken with a whole city mindset, and we’ll soon be establishing a Visitor Levy Forum with an independent Chair. We’ll also be reporting next steps to executive Council committees.”

Neil Ellis, chair of the Edinburgh Hotels Association, added: “Edinburgh Hotels Association welcomes the introduction of the visitor levy for its intended use of improving the experience of all visitors - local, national or international - through additional spending. This is a fantastic opportunity to further enhance Edinburgh’s reputation on the World stage as a must visit destination.”

Donald Emslie, a representative of Edinburgh’s tourism industry, commented: “This new income stream presents a unique opportunity to generate significant funds for the city’s long-term development. The levy’s potential to generate transformative funds for the benefit of all who live, work, and visit Edinburgh is well recognised and I’m pleased to see a decision made to declare a scheme which will not only support spending on city operations and infrastructure, but sustain Edinburgh’s cultural offering and destination and visitor management.”

Conversely, the Association of Scotland’s Self-Caterers (ASSC) warned that the “badly implemented policy will do more harm than good”.

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “We are extremely disappointed that Edinburgh Council has failed to properly appreciate the widespread concerns of our sector who are the ones responsible for administering this tax.

“While the transition period will be altered by a few months, there remains very clear operational impossibilities. In the rush to be first, rather than getting it right from the get-go, their slapdash approach risks undermining the levy before it has even started. Edinburgh will be a guinea pig for this new tax and hopefully other councils will now take stock and learn from the mistakes made.

“While tourist levies are common in other destinations, Edinburgh’s plans make it an outlier. First, it is a tax on a tax: the 5% levy itself is subject to 20% VAT, something unheard of in Europe. Other destinations have a reduced rate of VAT on tourism services, where Scotland does not. Those demanding a levy of 8% or more need a reality check.

“Second, this is not an ‘international’ visitor levy paid only by foreign tourists with exemptions for residents, but one applicable to ordinary Scots staying overnight in the capital, those who have already made a financial contribution to local services. And as with all taxes, the only way is up, especially when councils are starved of funds.

“Finally, the credibility of those continuing to blame the tourism industry for all manner of ills, especially the relatively small number of short-term lets, is wearing thin. The housing crisis won’t be solved by causing a crisis in Scottish tourism; and those seeking to respond to the Housing Emergency should focus their ire on the capital remaining an empty homes hotspot.   

“We understand the rationale behind a visitor levy but a badly implemented policy will do more harm than good, damaging the very industry it is supposedly meant to support.”