Councils to be given greater flexibility over visitor levy

The Visitor Levy (Scotland) Act 2024 grants councils the power to raise funds for tourist services and facilities by applying a charge on overnight stays based on a percentage of accommodation costs.

Edinburgh is due to be the first city to implement the levy, which charges a set percentage on overnight stays in hotels, hostels, guest houses, B&Bs and self-catering accommodation, in July next year, while Glasgow is due to operate a similar scheme from January 2027.

However, new proposals will give councils the choice of setting a fixed amount instead. Councils will also be given the option of setting different fixed amounts such as for different geographical locations, times of year or types of accommodation.

In Edinburgh, the tax will see five per cent added on to the price of each night of accommodation, up to five nights. Mimicking similar schemes that exist in places like Germany, Spain and Italy, it is hoped the tax will bring in £50 million annually for Edinburgh. Glasgow’s scheme will also charge a five per cent levy. It is expected the fee could bring in about £16m annually after costs and will apply to hotels, hostels, guest houses, B&Bs and self-catering accommodation.

The new legislation will also clarify how levies are applied to sales via third parties, such as booking platforms, and the information accommodation providers must share with councils.

The bill is intended to be introduced in early 2026.

Public finance minister Ivan McKee said: “The visitor levy empowers councils by giving them a new way to raise money for investment in tourist services and facilities. Our aim has been to give councils the flexibility to design a levy that works for their areas, while ensuring businesses can easily understand what it means for them.

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“The Act passed last year was an example of partnership working between the Scottish Government, local government and tourism businesses. Through regular discussions with our partners, it became clear that further flexibility would be welcomed. That is why we have decided to legislate next year, to ensure local visitor levies work effectively for everyone.”

Fiona Campbell, chief executive, Association of Scotland’s Self-Caterers and vice chair of Scottish Tourism Alliance (STA) policy group, said: “We welcome the announcement of the Expedited Visitor Levy Bill. It provides an innovative and pragmatic mechanism for reforming Scotland’s visitor levy, increasing local flexibility and demonstrating clear cross-party recognition that urgent change is required.

The inclusion of a flat-rate option is a hugely positive step and something the industry could not have imagined being on the table even two months ago. It shows that the Scottish Government has listened to consistent, evidence-based concerns from operators, councils and wider stakeholders. The move towards flexibility mirrors the strong alignment of industry bodies, MSPs, local authorities, online travel agencies, and accommodation providers calling for a fairer and more practical model for implementation.”

A recent Scotsman investigation revealed that accommodation providers are failing to make it clear if prices advertised for rooms available for booking for next summer in Edinburgh include the new visitor levy. It was revealed that major booking sites, including Booking.com and Airbnb, do not state clearly whether or not the levy is included in the currently advertised price for rooms available for next summer. This is despite regulations stipulating this information should be available in the terms and conditions of the reservation.

Guidance issued to accommodation providers by the council also recommends that websites and adverts are updated to make it clear the levy is included in the price, but that is at the discretion of the company.