Edinburgh is making history as the first city in the UK to introduce a tourist tax for overnight stays. Starting in mid-2026, visitors who book hotels, B&Bs, hostels, or other accommodations will pay a 5% fee per night, capped at five nights. The money collected will go toward improving local services and infrastructure.

City officials say the move is necessary to manage the strain tourism puts on Edinburgh’s resources. Last year, nearly 5 million overnight visitors spent over £2.2 billion in the city. The new tax is expected to generate up to £50 million annually by 2028 or 2029, helping to fund sustainable development.

The idea of a tourist tax has been in the works since 2018, but it only became feasible after the Scottish government passed the Visitor Levy Act in July. Under the act, the revenue must be used for services and facilities that benefit both tourists and residents.

Not everyone is thrilled about the new charge. While just over half of locals and businesses support the 5% fee, most visitors are either against it or think it should be lower. Some council members even argued for a higher rate, hoping to use the funds to address affordable housing shortages in the city.

The tax plan was adjusted after feedback from tourism groups. Originally set at seven nights, the cap was reduced to five to accommodate performers and workers during Edinburgh’s famous festivals, who often stay for weeks.

Edinburgh isn’t alone in this trend. Cities like Venice and Amsterdam have already implemented similar fees, with Amsterdam charging a whopping 12.5% nightly rate. Wales is also considering its own tourist tax legislation.

For Edinburgh, this move is seen as a chance to invest in the city’s future. As one official put it, it’s “a once-in-a-lifetime opportunity” to make Edinburgh an even better place to visit—and live in—year-round.