Starting July 24, 2026, Edinburgh will become the first city in the United Kingdom to implement a "tourist tax" on overnight accommodations. The City of Edinburgh Council approved a 5% per night fee on all paid overnight stays within the city limits. This applies not only to hotels but also to a wide range of accommodations, including self-catering apartments, aparthotels, bed and breakfasts, guest houses, hostels, short-term rentals, and even boats and caravans.

The fee is calculated as 5% of the accommodation cost, excluding extras like parking, meals, or transportation, and is applied before VAT. It's capped after five consecutive nights, meaning visitors staying longer won't face escalating charges.

While dubbed a "tourist tax," the levy applies to anyone paying for overnight accommodation in Edinburgh, regardless of their reason for visiting or residency. This includes tourists, business travelers, and even local residents staying in paid accommodations.

The council projects the tax will generate approximately £50 million (around $63 million USD) annually. These funds are intended to be reinvested in the city to enhance its appeal for both visitors and residents.

Council leader Jane Meagher hailed the decision as a "historic moment" and a "once-in-a-lifetime opportunity" to invest in the city. She emphasized the broad support for the tax, particularly among residents.

However, the new tax has also drawn criticism. Leon Thompson, executive director of UKHospitality Scotland, expressed concerns that the added cost would make Edinburgh less competitive as a tourist destination, potentially impacting visitor spending and discouraging future trips. He urged the council to utilize the generated funds effectively to improve the city's attractiveness and offset the tax's impact on businesses.