A TOURIST tax is set to be implemented in Edinburgh after the plan passed its final hurdle on Friday.
Following a special meeting of Edinburgh City Council, elected members have agreed to implement a 5% visitor levy on people staying in hotels, bed and breakfasts and other accommodation, including holiday lets.
Council leader Jane Meagher has previously described the levy as a "once-in-a-lifetime opportunity" to invest in the city as it has the potential of raising up to £50 million a year for the authority.
However, the SNP group has called the finalised plan “timid” given they wanted to impose a 7% tax that would have seen £20 million a year put towards tackling the city’s housing crisis.
The party said its proposal would have delivered a total of almost a billion pounds – £997.6m – over 30 years to spend on social and affordable housing, amounting to more than 5000 more council houses. Labour’s proposal is set to deliver 13% of that.
The City of Edinburgh Council declared a housing emergency in 2023, with thousands of households living long-term in temporary accommodation.
The agreed plan will see £130 million allocated each year for affordable housing.
The Labour administration also came under fire from the SNP for working with the Conservatives and LibDems to delay the start date for businesses by nine months from May to October 2025.
Concerns had been raised by accommodation providers they were not being given enough time to adapt to the scheme.
SNP group leader Simita Kumar accused Labour of an “absence of ambition”.
Tourist Tax has passed final hurdle, £40m a year for Edinburgh will (eventually) come but Labour’s deal with Tories is a real lost-opportunity: 💷Delaying implementation costing City millions in revenue👎 🏠Voted down SNP plan to build 5,000 extra affordable homes over 30yrs👎 https://t.co/CJFGUb7zxX
— Cllr Adam Nols-McVey (@adamnolsmcvey) January 24, 2025
She said: “The SNP put forward a bold and ambitious plan to use this valuable new power given to Edinburgh by the Scottish Government to help tackle Edinburgh’s housing emergency, which would have put almost £1 billion additional funding into social and affordable homes.
“It is frankly shameful that the Labour administration has put forward this timid plan, which represents a paltry 13% of what the SNP proposed to spend on housing. It’s little wonder that the Tories felt able to support their plan, along with the Lib Dems.
“Added to that is their disgraceful capitulation to business lobbying to delay this long-awaited scheme by nine months.
“This was a historic chance to balance the economic benefits our city gets from its tourism industry with tackling the impact it has also had on our housing emergency. I regret that it has largely been passed up by Labour and their Tory and LibDem allies.
“While I welcome that we have agreed that Edinburgh will start collecting Visitor Levy from next year, this vote represents a failure of nerve and an absence of ambition.”
It comes after Holyrood last year approved legislation giving councils across Scotland the ability to introduce such a charge.
The Association of Scotland’s Self-Caterers has been critical of the plan, saying the council has refused to “appreciate the widespread concerns” of the sector.
CEO Fiona Campbell said: “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.”
Under the council’s plans, the levy will begin for stays taking place after July 24, 2026. There will now be a nine-month transition period, with bookings paid for in part or in full after October 1, 2025 being liable for the levy.
