Edinburgh's tourist tax is here - how much is it and who pays?

Thousands of people descend on Edinburgh during the festival season in August

Edinburgh has become the first city in Scotland to introduce a tourist tax.

The visitor levy, which came into effect on Friday, will see those staying overnight in hotels, bed and breakfasts and self-catering accommodation, charged an additional 5% on top of their original booking cost.

It is hoped the charge, which aims to raise about £50m annually, could be used to fund improvements to the capital, including new housing, cultural initiatives and a wider police presence.

However, opponents claim the additional cost could put some potential visitors off.

The Scottish government passed the Visitor Levy (Scotland) Bill in May 2024, granting councils power to impose a tourist tax.

City of Edinburgh Council voted in favour of introducing the charge in January last year.

It brought the city in line with other popular European destinations including Amsterdam, Paris and Rome in taxing visitors.

Visitors will be charged a 5% fee on top of the cost of their accommodation booking.

That will be collected by accomodation providers and passed to the city council.

However, the charge is capped at five nights, so those booking for the whole month of August, for example, will not face a 5% cost on every night of their stay.

A £100-per-night room for five nights, costing a total of £500, would end up as £525 with the levy applied.

Booking that same room for 10 nights, at a cost of £1,000, would end up as £1,025, with the tax.

The rate does not go up or down depending on the time of year.

Exemptions are applied in certain circumstances, including for those presenting as homeless and housed in emergency accommodation, those at risk of domestic abuse or other forms of violence and those who have to be temporarily rehoused due to poor living conditions.

Asylum seekers and refugees are also exempt, as are some of those who receive disability benefits.

All of those covered by the exemption will pay the levy initially, but can claim it back at a later date.

The levy is not paid by everyone arriving in the city, only those who stay overnight.

The charge is being introduced in time for Edinburgh's traditional summer festival season in August.

The Edinburgh International Festival, Festival Fringe, Art Festival, Book Festival, Film Festival and Royal Military Tattoo all take place across the month.

That means those taking a day trip from elsewhere in Scotland or the wider UK do not have to pay.

The council has backed exploring a separate tax on those arriving by cruise ship, external