The Edinburgh Tourist Levy to raise £50m a year, to build 472 new houses for locals and more city centre police officers

Reader Arty Hetty has been hearing rumours from elements stirring against the Tourist Levy:

‘Far as I know Edinburgh council are introducing a tourist tax, with the proceeds apparently going to be used to build houses for workers from outwith Scotland, not for services for the residents that are impacted by tourism…needs more investigation but that’s what I saw reported recently.’ 

stewartb (with added comment below from Legerwood) responding to these rumours:

How does it stack up against what the Council is stating? There is an abundance of information on the Levy and what has already been agreed in terms of its initial spend programme. (See City of Edinburgh Council website: ‘How we’re investing the Edinburgh Visitor Levy’ – https://www.edinburgh.gov.uk/business/well-invest-edinburgh-visitor-levy/2 )

‘The levy is expected to raise £45-50 million a year by 2028/29. The money generated by the scheme will be reinvested directly into initiatives that benefit residents and enhance visitor experiences.

‘After administration and contingency costs, a fixed amount will be assigned to – housing and tourism mitigation (£5 million annually) – participatory budgeting (£2m over three years) – reimbursement of 2% of collected funds to accommodation providers, to off-set the administrative cost incurred from collecting the levy.

And for the bulk of the revenue: ‘Remaining funds will then be split across three investment streams –

  • city operations and infrastructure (55%)
  • culture, heritage and events (35%)
  • destination management (10%).’

I also noted this: ‘The initial spend programmes have been developed by Council officers, informed by feedback from public consultation and industry engagement, elected members and other stakeholders. The independent Edinburgh Visitor Levy Advisory Forum has also been consulted and provided feedback and recommendations on the programmes.’ nt

Apparently, the relevant Act of Parliament – Visitor Levy (Scotland) Act 2024 – stipulates that a Visitor Levy Advisory Forum must be in place to help inform and shape how the levy will be invested and monitored. Details of the Forum and its terms of reference are provided on the Council’s website.

The initial levy spend programmes were agreed at a special meeting of the Council on Thursday 12 February 2026. It’s a diverse set of spending plans: if I have one concern it is that perhaps it’s too diverse, too much salami slicing of the total annual tax revenue. Not sure where the charge that it will be used ‘to build houses for workers from outwith Scotland’ could come from but would be interested to know!

There is within the diverse spending plan, a reference to a Housing and Tourism Mitigation Fund: ‘This fund could help deliver 472 affordable homes between 2026/27 and 2028/29, with more than 75% potentially available for social rent. Making more social rent homes available would allow households currently using unsuitable temporary accommodation, such as bed and breakfasts, to access more appropriate settled accommodation. This would return B&Bs to their intended use for shorter-term guests.’ As indicated earlier, this seems to constitute just £5 million annually out of the expected total of £40-50 million per annum.

And from Legerwood

That sounds like someone is stirring it. The income from the visitor levy will be spent on a range of projects and yes it does include houses – 472 in 2026-27 according to the article below but they won’t be for migrants.

Here is the link scroll down to the section on the expected income and the various projects that will be funded https://www.bbc.co.uk/news/articles/cvgl8j37839o#:~:text=A%20range%20of%20projects%20and,Hunter%20Square%2C%20Cramond%20and%20Portobello

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7 thoughts on “The Edinburgh Tourist Levy to raise £50m a year, to build 472 new houses for locals and more city centre police officers”

  1. How can I put this gently? Let’s be careful what info based on unverified third party sources we aggregate and amplify, even when the topic concerns a Labour run Council.

    To explain, I’ve just noted btl on Wee Ginger Dug’s most recent blog post the same claim that Edinburgh’s Tourist Levy will be used to build houses for workers from outwith Scotland. As Legerwood (above) says: “That sounds like someone is stirring it.”

    And given the nature of the claim, one may be able to guess the views of the originator – who I accept – and emphasise – is NOT the person/s sharing the claim on TuS and Wee Ginger Dug!

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    1. Yes as I said it would need investigating to work out what the facts are…

      I follow this site just to see what they are saying and reporting about the capital city, taking most of their articles with a pinch of salt.
      They have their interpration in the article about the tourist tax here…I presume ok to share, scroll to bottom of page for the article.

      I just don’t have time to keep up with everything, articles,reports etc, so grateful for being put right on such things. 🙂

      https://open.substack.com/pub/edinburghinquirer/p/the-tourist-tax-is-building-cheap?utm_campaign=post-expanded-share&utm_medium=web

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    2. O/T
      Labour council in Edinburgh are a disgrace and to show their disrespect you just have to see the ‘giant s**te’ building in full view of the city 360degrees especially as it’s so close to the Scottish parliament. It’s a massive two fingers at the city.
      It was approved by the English parties at the council and could hardly be more disrespectful to Scotland.

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    1. There are already initial plans announced which will address these issues by no means a complete list yet. For example, upgrading existing public toilets and providing more as well as improvements to the ‘public realm’ in various places. So it will over time make a difference to tourists and residents alike

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  4. From the Edinburgh Inquirer (July 9) article referenced in an earlier btl post: ‘The tourist tax is building cheap homes for city workers – Who will be at the front of the queue when they open their doors?

    ‘Emma Newlands has been looking at the city’s plans to invest £5 million a year from the proceeds of the capital’s new so-called ‘tourist tax’ in affordable homes. Flats being built on the edge of the city centre are going to be reserved for “visitor economy workers”, but who exactly will benefit and how will these protected properties be managed?’

    ‘… two blocks of flats due to open in Meadowbank and Fountainbridge in around 18 months time is that some of them – 111 to be precise – will be reserved for “visitor economy workers”. This will be one of the first fruit’s of the city’s so-called tourist tax, officially the Visitor Levy, which is expected to generate up to £50 million a year by charging visitors an extra 5% on their accommodation bills.’

    ‘Edinburgh has followed the example of some of the most pressurised tourist resorts in the world, from Alpine and North American ski resorts to Hawaiian beach destinations, by introducing subsidised public housing reserved for industry workers. The city council has committed £5 million a year to the idea which will be used to kickstart developments comprising 472 affordable homes at Fountainbridge, Meadowbank and Coatfield Lane in Leith.

    ‘As well as creating 361 social rented homes, the first two developments will include 111 homes for mid-market rent (MMR) which will be reserved for industry workers.

    “Levy funds would, along with rental income, support the cost of borrowing, and free up resources within the wider housing budget for investment in more homes to address the housing emergency,” according to council documents. It’s an idea which, as well as being threatened with potential legal challenge (which never ultimately materialised), has won widespread support.

    ‘James Garry, assistant director at conversation charity The Cockburn Association, told The Inquirer the principle behind the proposal to create homes for tourism workers is “understandable”. “Edinburgh’s visitor economy depends on people being able to live and work in the city, and the cost and availability of housing is increasingly affecting recruitment and retention across a number of sectors,” he adds.’

    And from the Council -https://www.edinburgh.gov.uk/news/article/14329/plans-for-visitor-levy-housing-spend-approved

    ‘Council Leader Jane Meagher said: Many of those working in our city’s thriving visitor economy and cultural sectors are often unable to find affordable housing in the city, making it difficult for them to live close to where they work. In addition, the Council has declared a housing emergency, with more and more people presenting as homeless and not enough social homes available to meet this demand, and so too many residents have to use temporary accommodation, often in bed and breakfasts or hotels, taking vital capacity away from what should be tourist accommodation. That’s why it’s so important that this new funding is being committed towards a Housing and Tourism Mitigation Fund, which will be used alongside our existing investment programme for house building.

    ‘This will ensure affordable homes are available for visitor economy workers in the city and means that bed and breakfast and hotel rooms can be used for their intended purpose – to welcome visitors to Edinburgh. This is the first fully agreed use of the Edinburgh Visitor Levy’s funds and will help deliver our objectives of developing, supporting and sustaining the quality public services and infrastructure that Scotland’s capital city must deliver for all visitors, residents and businesses.’

    Note, the above will use £5m out of at least £40m new revenue from the Levy and the allocation specifically to ‘visitor economy’ workers is for only part of the new housing stock.

    Still struggling to locate the explicit claim that the new housing will go to individuals or families not from Scotland! Anyone?

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