BREAKING NEWS - Tax Changes for Landlords

The UK Government has announced plans to give elected mayors and local councils in England and Wales the power to introduce a new tourist tax on short-stay accommodation, including short lets, holiday lets, hotels, B&Bs and guesthouses.

The proposed charge would apply to overnight stays, with the decision — and the level of the fee — set locally. The Government says this will allow leaders to introduce a “modest charge” where appropriate, similar to existing schemes in New York, Paris and Milan.

Housing Secretary Steve Reed said the move would “give local leaders the same powers as their counterparts in global cities,” and allow tourism income to be reinvested back into communities.

“We’re giving mayors the tools to put more money into local priorities, to keep driving growth and investing in their regions for years to come.”

— Steve Reed, Housing Secretary

Under the proposal, landlords and operators of short lets and holiday accommodation would be responsible for collecting the fee.

A 12-week public consultation is now open, but several Labour mayors have already expressed strong support.

The UK Government has announced plans to give elected mayors and local councils in England and Wales the power to introduce a new tourist tax on short-stay accommodation, including short lets, holiday lets, hotels, B&Bs and guesthouses.

The proposed charge would apply to overnight stays, with the decision — and the level of the fee — set locally. The Government says this will allow leaders to introduce a “modest charge” where appropriate, similar to existing schemes in New York, Paris and Milan.

Housing Secretary Steve Reed said the move would “give local leaders the same powers as their counterparts in global cities,” and allow tourism income to be reinvested back into communities.

“We’re giving mayors the tools to put more money into local priorities, to keep driving growth and investing in their regions for years to come.”

— Steve Reed, Housing Secretary

Under the proposal, landlords and operators of short lets and holiday accommodation would be responsible for collecting the fee.

A 12-week public consultation is now open, but several Labour mayors have already expressed strong support.

🚩 Strong support from England’s mayoral leaders

Sadiq Khan, Mayor of London, called the proposal “great news for London,” saying revenues would be reinvested into the capital’s visitor economy and infrastructure.

Liverpool Mayor Steve Rotheram highlighted that comparable global cities already raise millions through tourist levies, adding:

“This money stays local and is reinvested in the culture, events and public spaces that make our region stand out.”

Greater Manchester Mayor Andy Burnham said the levy would support long-term growth:

“Nearly two million people visit Greater Manchester every year. A visitor levy will allow us to invest in what they need — cleaner streets, improved transport, and a stronger visitor experience.”

⭐ Important: This proposal applies only to England & Wales — NOT Scotland (for now)

The newly announced powers cover England and Wales only.

Scotland already consulted on introducing a visitor levy — known as the Local Visitor Levy (Scotland) Bill — which would allow Scottish councils to introduce their own tourist tax. This has been discussed extensively, particularly in Edinburgh and the Highlands, where tourism puts heavy pressure on services.

However:

✔ Scotland’s legislation is 

not yet in force

✔ No Scottish local authority currently has legal power to impose a visitor levy

✔ A Scottish Government decision is expected following further parliamentary stages

The framework would operate similarly to the proposals in England & Wales:

• Local councils would set the levy

• It would apply per person per night

• Operators (including short-let landlords) would collect it

• Funds would be reinvested in local services and tourism infrastructure

Edinburgh Council has repeatedly indicated support and previously pushed to introduce a levy of around £2 per night, pending government approval.

Industry analysts expect that Scotland will move ahead shortly after England/Wales, as the political appetite already exists and the tourism sector is prepared for it.

⭐ Summary: What short-let and holiday-let owners need to know

England & Wales

• A new visitor levy is being proposed

• Local mayors/councils can decide whether to introduce it

• Applies to short lets, holiday lets, hotels, B&Bs

• Operators must collect the fee

• Consultation is open for 12 weeks

Scotland

• No levy yet

• Legislation is progressing in Parliament

• Expected to be introduced in future

• Edinburgh and other councils already signalling support

• Short-let operators should prepare for similar obligations

The Housing (Scotland) Bill has though passed Royal Assent and WILL affect all landlords here in Scotland. To request our free guide, please request an online rental valuation of your property here and it will be automatically sent to you.