Affordable Homes Initiative
Edinburgh is set to implement a significant change for tourists, introducing a 5% levy on all overnight accommodations starting from July 24, 2026. This
visitor tax, applicable to hotels, bed and breakfasts, and self-catering establishments, is projected to generate approximately £50 million each year. A substantial portion of this revenue is earmarked to directly combat the escalating housing crisis within the city. Specifically, £5 million has been allocated to construct 472 new affordable homes over the 2026/27 and 2028/29 periods. This dedicated funding stream, officially approved as part of the council's latest budget, will support three key new-build housing developments located at Fountainbridge, Meadowbank, and Coatfield Lane in Leith. The housing project is planned to deliver around 360 social-rented units and approximately 110 mid-market rent homes, aiming to provide much-needed housing solutions for residents.
Investing in City Vibrancy
Beyond addressing the critical housing shortage, the revenue generated from Edinburgh's visitor levy will also play a crucial role in enhancing the city's broader appeal and functionality. The city council has committed over £90 million in total funding over the next three years to maintain and elevate Edinburgh's standing as a world-renowned destination. This comprehensive investment includes significant allocations for public realm improvements, such as £3 million for upgrades in Hunter Square. Furthermore, substantial investments are planned for coastal visitor attractions, with £2 million and £2.5 million dedicated to revitalizing Cramond Foreshore and Portobello Promenade, respectively. The arts and culture sector will also benefit immensely, with £5 million allocated for the restoration of Leith Theatre to create a year-round cultural and live music venue, and £3 million towards transforming the Old Royal High School into a premier national centre for music. An additional £2.75 million is designated for establishing Market Street Arts Hubs, alongside £3.85 million to accelerate the Setted Streets renewal program and £3 million for new and improved public toilet facilities across the city. These combined initiatives underscore a commitment to improving both the visitor experience and the quality of life for permanent residents by better managing the impacts of tourism.
A Forward-Thinking Approach
Edinburgh's proactive stance in implementing this city-wide visitor levy scheme positions it as a leader among UK local authorities. Council leader Jane Meagher expressed immense pride in this pioneering initiative, highlighting it as a significant opportunity for the city, its inhabitants, and its visitors. The strategic deployment of these funds is designed not only to preserve and amplify the unique qualities that make Edinburgh so attractive but also to more effectively manage the consequences of extensive tourism and large-scale events on the local population. This forward-thinking approach ensures that the city's growth and development are balanced, addressing immediate needs like housing while simultaneously investing in the long-term cultural and infrastructural well-being that sustains Edinburgh's global reputation and ensures it remains an enjoyable place for everyone, year-round.
