Edinburgh City Council has approved a 5% visitor levy, making the city the first in Scotland to introduce such a ...

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Edinburgh City Council has approved a 5% visitor levy, making the city the first in Scotland to introduce such a tax. Despite this milestone, proposals from the SNP and Greens to raise the levy to as high as 8% to tackle housing issues were rejected.

Calls for a Higher Levy

The SNP argued that increasing the tax to 7% could generate an additional £16 million, which they said could fund the construction of over 1,000 affordable homes within five years. The Green Party suggested an even higher rate of 8%, projecting an additional £70 million in revenue over three years. They also proposed allocating a significant portion of the income to affordable housing initiatives.

Speaking to the council, tenants’ union Living Rent criticised the current approach, describing it as “shameful” that workers in the city’s tourism industry could not afford to rent homes while Edinburgh caters to a thriving short-term let market.
“We have an estimated 1,025 homeless people living in hotels while homes are being used by tourists,” the union said, calling for a stronger stance to address the housing crisis.

A Divisive Decision

While proponents of a higher levy sought to address the critical housing shortage in the capital, the council ultimately chose to proceed with the 5% rate, citing the need for balance between economic growth and affordability for visitors. The move reflects Edinburgh’s efforts to generate funds while remaining competitive in the global tourism market.

Transition Period Extension Under Consideration

The council is still deliberating on calls from the hospitality industry to extend the transition period for implementing the levy by up to nine months, giving businesses more time to adapt to the new rules.

Housing and Tourism in Conflict

The debate highlights the tension between the housing crisis and Edinburgh’s booming tourism industry. Critics point to the impact of short-term lets on housing availability and the rising use of hotels as emergency accommodation for the homeless.

As Edinburgh moves forward with its visitor levy, questions remain about how the funds will be allocated and whether the initiative will strike the right balance between boosting city revenues and addressing housing challenges.

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