The amendment legislation allows local authorities to set a visitor levy as either a percentage of the cost of an overnight stay or as a fixed fee per room, property, or area. Councils can also introduce multiple fixed charges depending on location or seasonality. Previously, under the Visitor Levy (Scotland) Act 2024, councils were limited to applying a percentage-based charge.
Council's independent decisions
The revised powers mean councils can move away from percentage-based models and instead apply flat-rate charges regardless of the overall value of the accommodation. Local authorities can also introduce different levy levels for different accommodation types, allowing higher-cost properties to face higher charges than lower-cost accommodation.
Each council will decide independently whether to introduce a scheme, and legislation requires lead-in periods before new levies are implemented or where councils switch between percentage and fixed-rate systems.
Edinburgh has already confirmed it will introduce a five per cent visitor levy on overnight stays from 24 July 2026, becoming the first council in Scotland to implement the powers. The levy will apply to hotels, holiday lets, short-term rentals, and residential properties licensed for home sharing, home letting, or use as secondary homes.
Under the current percentage model, a £100 overnight stay during Edinburgh’s peak festival season would attract an additional £5 charge. The city’s move comes amid continued pressure from tourism demand, with major events such as the Edinburgh Festival Fringe and large-scale concerts regularly attracting hundreds of thousands of visitors.
Local authorities will also have the discretion to allow accommodation providers to retain a proportion of the levy to offset the administrative burden of collecting the tax, although councils are not required to do so.
Review and access
The Scottish Government must review the operation of the legislation three years after the first visitor levy scheme takes effect, including assessing the impact on tourism in rural areas.
Propertymark has warned that the growing number of taxes and regulatory changes affecting Scotland’s housing and tourism sectors risk increasing costs for landlords, tenants, visitors, and property businesses without addressing underlying supply issues.
Incentivise investment
The introduction of visitor levies follows the significant tightening of regulation in Scotland’s short-term lets sector. Since 2022, all short-term let hosts have required a mandatory licence, while Edinburgh also requires planning permission for many properties. The number of licensed properties has already fallen, with hundreds of applications still awaiting determination.
Propertymark has consistently supported stronger regulation to create a level playing field between short-term and long-term rentals, arguing that without proper oversight, some short-term accommodations can avoid basic safety and consumer protection standards.
At the same time, landlords in the private rented sector are facing increased costs elsewhere. Scotland’s Additional Dwelling Supplement (ADS) rose from six per cent to eight per cent in December 2024, making Scotland the most expensive part of the UK for additional property purchases. Earlier in 2026, the Housing Investment Taskforce also warned that property taxation requires wider review to assess its impact on housing mobility, investment, quality, and net zero ambitions.
Propertymark says a more effective approach would focus on incentives that encourage investment in housing quality, energy efficiency, and long-term supply rather than increasing taxation. The organisation argues that unless visitor levy schemes are aligned with broader tourism strategies and housing policy is better integrated with economic policy, the likely outcome will be higher costs, reduced accommodation supply, and fewer choices for tenants and visitors.
