Edinburgh has become the first UK city to charge all visitors for staying overnight as a new tourist tax comes into force.

Starting from Friday, 24 July, all paid accommodation in the Scottish capital will charge a five per cent fee on top of the original booking cost, capped at five nights in a row.

For example, if a person booked a £100 per night hotel and stayed for five nights, the bill would be £525. If they stayed for an extra night or more, the visitor levy cost would remain at £25 as it would have reached its five-night cap.

For luxury accommodation in the city, such as a night at Gleneagles Townhouse, which is priced at £656 for an overnight stay on Monday, guests would be charged £688.80 a night. Across five nights this would equate to an extra £164, raising the cost of the stay from £3,280 to £3,444.

The visitor levy only applies to the part of the charge that covers the cost of overnight accommodation, so any meals, drinks, transport or other services charged to the room will not boost the extra visitor levy fee.

Bed and breakfasts that include the price of a breakfast in their overall charge need to exclude the retail value of the breakfast when working out the accommodation price. If a visitor pays £120 for one night in a B&B including breakfast, and the breakfast is worth around £10, the owner will need to subtract that price when working out the levy, meaning the rate will be five per cent of £110, which is £5.50. In total, the bill will be £125.50.

In a scenario where a five-bed self-catering accommodation is rented out, the visitor levy applies to the total accommodation charge for the unit, not per person or per room, so it will not matter how many people it sleeps.

The scheme was formally agreed last year and the levy is being applied to all bookings made from 1 October 2025 for stays taking place on or after 24 July. The tax will be collected by the accommodation provider, then it is paid to the local authority.

The tax applies to a large number of accommodation types, such as hotels, hostels, campervans, boats that stay in one place, holiday lets and campsites.

The City of Edinburgh Council said that the levy, which will be reinvested into the city for the benefit of tourists and residents, is projected to raise up to £50m a year.

Councillors have revealed the first round of investments to be funded using money raised by the levy. These include a £132,000 contribution to Edinburgh’s Festival Carnival and Mardi Gras events, funding for 10 festival city ambassadors, and the creation of a city centre policing unit.

They say the levy funds will also be used for cleaning and maintaining the streets, improvements to Hunter Square in the city centre, upgrading public toilets and investing in parks and green spaces.

The council also hopes to commit funds to arts projects, such as a £5m contribution to restore Leith Theatre and £3m towards transforming the Old Royal High School into a national centre for music.

Council Leader Jane Meagher said: “This is such an important moment for our city – and for our residents and visitors. It’s the result of a huge amount of work over many, many years and I am proud to be the first local authority in the UK to push ahead with a city-wide visitor levy scheme. We now have a unique opportunity to invest more in the things that make our city so special.

Ms Meagher explained that the city’s popularity “comes at a cost”, as the increasing number of tourists who use public services puts “pressure” on infrastructure, affecting people who live in the city year-round”.

She added: “This small new contribution from overnight visitors will help improve the services and public spaces we all depend on, while better managing the effects of tourism and major events.”

“The levy has also opened the door to exciting new projects right across the city - helping to make Edinburgh a cleaner, greener and more welcoming place.

“This is a big opportunity for us all to work together and enhance Edinburgh’s position as one of the most popular visitor destinations in the world.”

The Visitor Levy (Scotland) Act became law in September 2024. The next Scottish cities to introduce a tourist tax will be Glasgow and Aberdeen in early 2027.

Read more: High costs in Edinburgh ‘little to do’ with new visitor levy, says council