On 24 July 2026, Edinburgh made history as the first city in the United Kingdom to introduce a statutory visitor levy.
If you own or manage a short-term let anywhere within the City of Edinburgh Council boundary, this change affects you directly – and if you are not already collecting and remitting the levy correctly, you need to be.
This article covers everything you need to know: where the levy came from, how it works in practice, what your legal obligations are, what it means for your pricing strategy and what to do next.
Background: where did the Edinburgh Visitor Levy come from?
The Edinburgh Visitor Levy did not appear overnight. It has been discussed, debated and consulted on for several years, with Edinburgh City Council and the Scottish Government working through the legislative framework that would eventually make it possible.
The enabling legislation is the Visitor Levy (Scotland) Act 2024. This Act gives Scottish local authorities the power to introduce their own visitor levies, setting their own rates and deciding how the revenue is spent. Edinburgh was the first council to exercise that power, having run an extensive public consultation and commissioned economic impact assessments before confirming the scheme.
The levy is not unique to Scotland in a global context. Visitor levies are standard practice across much of Europe – Amsterdam, Barcelona, Paris, Rome and dozens of other major cities have operated similar schemes for years. In that sense Edinburgh is catching up with international norms rather than introducing something radical. What makes it notable in the UK context is that it is the first. Other Scottish councils are watching how Edinburgh’s implementation unfolds before deciding whether to introduce their own schemes. In England, the Devolution Bill is giving mayoral authorities powers to introduce visitor levies, with London and Manchester the most likely early movers.
The revenue raised is ring-fenced for visitor-related spending. Edinburgh City Council has indicated this will include investment in the infrastructure, cultural events and public spaces that make the city attractive to visitors in the first place – a position that has some logic to it, even if the hospitality and short-term let sectors have expressed concerns about the administrative burden and the potential impact on demand.
How the levy works: the practical detail
Rate and scope
The levy is set at 5% of the accommodation cost. It applies to all paid overnight accommodation within the City of Edinburgh Council boundary, including hotels, B&Bs, guest houses, hostels, holiday lets and short-term lets. Operating below the VAT threshold does not exempt you from the levy – it applies regardless of your turnover.
The levy is calculated on the accommodation element of the booking only, before VAT. It does not apply to extras charged separately such as parking, meals, cleaning fees, transport or other services.
The five-night cap
One of the most important details of the Edinburgh scheme is that the levy only applies to the first five consecutive nights of any stay. A guest staying for three nights pays the levy on all three nights. A guest staying for seven nights pays the levy on the first five nights only – nights six and seven are exempt.
In practice this means that longer stays – a week or more – carry a lower effective levy cost per night than short stays, which may be worth factoring into your minimum night stay strategy.
Which bookings are affected
This is the detail that has caught some operators out. The levy applies to stays from 24 July 2026, but only for bookings made on or after 1 October 2025.
If a guest booked and paid – even partially – before 1 October 2025 for a stay that takes place after 24 July 2026, the levy does not apply to that booking. However, if a guest booked on or after 1 October 2025 for any stay from 24 July 2026 onwards, the levy applies regardless of when the stay takes place.
If you have advance bookings taken since October 2025 for stays from late July onwards, those bookings should already include the levy in the total charged to the guest. If they do not, this needs to be addressed.
A worked example
A guest books a four-night stay at a rate of £120 per night. The accommodation cost is £480. The visitor levy at 5% is £24 in total – £6 per night for four nights. VAT, where applicable, is then calculated on the full amount including the levy.
A guest books a seven-night stay at the same rate of £120 per night. The levy applies to the first five nights only – 5% of £600 – giving a total levy of £30. Nights six and seven carry no levy. The total charged to the guest is £840 accommodation plus £30 levy.
Your legal obligations as a provider
As the accommodation provider, you are the liable person under the Visitor Levy (Scotland) Act 2024. This applies even if a platform such as Airbnb or Booking.com handles your reservations. The responsibility to collect and remit the levy sits with you, not the platform.
Registration
You need to register on the national online visitor levy portal. This was available for operators to sign up from April 2026. If you have not yet registered, this needs to be done now.
Collection
The levy must be collected from guests and included within the total accommodation price displayed at the point of booking. You cannot add it as a surprise charge after booking. The total price shown to guests – including the levy – must comply with existing UK price transparency legislation.
Quarterly returns and payment
You must submit quarterly returns to Edinburgh City Council detailing total accommodation charges and total levy collected for that period. Payment is due at the same time as each return.
Your first quarterly return and payment covers the period from 24 July 2026 to 30 September 2026. It is due in October 2026.
Subsequent returns cover January to March (due April), April to June (due July), July to September (due October) and October to December (due January of the following year).
Record keeping
You must keep accurate records of all levy-relevant transactions for a minimum of five years. Edinburgh Council may conduct inspections and can impose penalties for providers who fail to collect or remit correctly.
The 2% reimbursement
Edinburgh Council reimburses accommodation providers 2% of the levy funds they collect, intended to offset some of the administrative costs of running the scheme – things like credit card charges and changes to accounting systems. This is not a large sum but it is worth knowing about.
VAT interaction
The levy income counts towards your turnover for VAT purposes. If you are approaching the VAT threshold, you should factor this into your calculations. If you are in any doubt, seek advice from your accountant.
What it means for your pricing strategy
The Edinburgh Visitor Levy is charged to guests and passed through to the council – it is not a direct cost to you. But it has real implications for how you price your property and how guests perceive the total cost of a stay in Edinburgh.
On a property charging £150 per night, a three-night stay now costs the guest £22.50 more than it did before. That is not enormous, but it is visible at the point of booking, and Edinburgh already sits towards the higher end of the UK accommodation market.
A few practical considerations
Your pricing software and channel manager need to be correctly configured to add the levy to eligible stays from 24 July. If your property is fully managed by mySTAYINN we are handling this on your behalf. If you manage any element of your pricing yourself, please check this is in place immediately.
The five-night cap makes longer stays slightly more attractive relative to short ones in terms of total cost to guests. If your property is well suited to longer stays – corporate visitors, festival week bookings, families on holiday – this is worth factoring into your minimum night stay settings.
The levy applies equally to all accommodation types in Edinburgh including hotels and B&Bs. This is not a competitive disadvantage specific to short-term lets – the entire market is subject to the same charge. Edinburgh’s position as a destination is strong enough to absorb it.
Do not attempt to absorb the levy yourself rather than passing it to guests. The levy is designed to be guest-facing and building it into your own pricing model rather than displaying it transparently creates both compliance risk and a pricing structure that is harder to manage over time.
The compliance connection
One important point that deserves its own section: operating without a valid short-term let licence in Edinburgh means you cannot legally collect or remit the visitor levy.
This creates compounding compliance exposure – unlicensed operators face potential criminal prosecution under the licensing scheme and separate penalties under the visitor levy scheme simultaneously.
If your licence is current and up to date, you are in the right position. If you are unsure about your licence status, if a renewal is coming up, or if you have not yet applied, please get in touch with us. Licensing support is part of our service and we have helped every client on our books navigate the application process successfully, at no charge.
Looking ahead
Edinburgh is the first UK city to introduce a statutory visitor levy, but it will not be the last. The Visitor Levy (Scotland) Act 2024 gives all Scottish councils the power to introduce their own schemes, and other councils are monitoring Edinburgh’s implementation closely.
In England, the Devolution Bill is providing mayoral authorities with powers to introduce visitor levies. London and Manchester are the most frequently cited likely early adopters, though implementation is not expected before 2027 at the earliest.
The direction of travel is clear. Visitor levies are becoming a standard part of the operating environment for short-term lets in popular UK destinations. Edinburgh operators are simply the first to navigate it.
The good news for professional operators is that the framework being established here – quarterly returns, a national portal, transparent calculation rules and a reimbursement mechanism – is designed to be manageable. The administrative burden is real but not unworkable, particularly for operators who already have good bookkeeping and reporting systems in place.
Summary: What you need to do
If you have not done these things already, they need to happen now:
- Register on the national online visitor levy portal if you have not done so since April 2026.
- Ensure your pricing software and channel manager are configured to apply the 5% levy to eligible stays from 24 July 2026 for bookings made on or after 1 October 2025.
- Check that the total price displayed to guests at the point of booking includes the levy and complies with price transparency requirements.
- Set up a system for tracking levy-relevant transactions so your first quarterly return, due in October 2026, can be completed accurately.
- Confirm your STL licence is current. An unlicensed operator cannot legally collect or remit the levy.
If you are a mySTAYINN managed client and have any questions about how this affects your specific property, please get in touch with the team directly. We are handling the configuration and reporting process for managed clients and are happy to talk through any questions.
