Understanding Scotland’s Visitor Levy and Its Impact on Holiday-Rental Owners

Scotland’s new Visitor Levy Act 2024 introduces a significant change for anyone involved in the holiday-rental market. This legislation gives local councils the power to charge a tax on overnight stays, affecting a wide range of accommodation providers. For holiday-rental owners, understanding this levy is essential to managing costs, pricing, and guest communication effectively.

A traditional Scottish holiday cottage in a rural setting

What the Visitor Levy Act 2024 Means

The Scottish Parliament passed the Visitor Levy Act 2024 to allow local councils to introduce a tax on overnight stays within their areas. The goal is to generate additional revenue to support local infrastructure, tourism services, and community projects affected by visitor numbers.

Councils have the option to adopt the levy or not, meaning the tax will apply unevenly across Scotland. Urban areas with high tourist traffic, such as Edinburgh and Glasgow, are more likely to implement the levy, while rural councils may choose to opt out.

The levy applies to all types of paid overnight accommodation, including:

• Hotels

• Bed and Breakfasts (B&Bs)

• Holiday-lets

• Self-catering properties

• Short-term rentals (such as those listed on platforms like Airbnb)

  
  

Each council will set its own rate, but the levy is expected to be a small daily charge per guest, typically ranging from £1 to £3 per night.

How Different Accommodation Types Are Affected

The levy impacts accommodation providers differently depending on their type and location.

Hotels and B&Bs

Hotels and B&Bs have traditionally been subject to various local taxes and fees. The visitor levy adds another cost layer, which they often pass on to guests through room rates or service charges. These businesses usually have established systems to handle such fees, making compliance more straightforward.

Holiday-Lets and Self-Catering Properties

Owners of holiday-lets and self-catering homes face new challenges. Many operate independently or through platforms like VisitScotland or Travel And Tour World listings. They must now factor the levy into their pricing or charge it separately. This could affect competitiveness, especially in areas where the levy applies but nearby regions do not.

Short-Term Rentals

Short-term rentals, including those on Airbnb and similar platforms, will need to adjust their listings to include the levy. This requires clear communication with guests about the additional cost and possibly updating booking systems to collect and remit the tax.

Interior of a holiday rental with a welcome brochure explaining visitor levy

What Holiday-Rental Owners Need to Consider

Owners should prepare for the visitor levy by focusing on three key areas:

Adjusting Rates

Decide whether to include the levy in the nightly rate or list it as a separate charge. Including it in the rate simplifies the guest experience but may make the property appear more expensive compared to those in non-levy areas.

Transparent Communication

Clearly inform guests about the levy before booking. Transparency builds trust and reduces disputes. Use property descriptions, booking confirmations, and welcome materials to explain the levy’s purpose and amount.

Administrative Compliance

Owners must understand their responsibilities for collecting and remitting the levy to local councils. This may involve registering with the council, submitting regular reports, and keeping accurate records. Platforms like VisitScotland may offer guidance or tools to help with compliance.

Different Scenarios: Cities vs. Rural Areas

The impact of the visitor levy will vary widely depending on location.

Properties in Cities with the Levy

In cities like Edinburgh, where the levy is likely to be introduced, holiday-rental owners will face increased costs. They may need to raise prices or absorb some of the levy to stay competitive. Urban properties often benefit from higher demand, which can offset the additional charge.

Properties in Rural Areas Without the Levy

Rural councils may choose not to implement the levy, giving holiday-rental owners a pricing advantage. However, this could create disparities in the market, with guests preferring levy-free areas. Owners in these regions should monitor council decisions closely.

Final Thoughts for Holiday-Rental Owners

The Visitor Levy Act 2024 marks a new chapter for Scotland’s tourism and accommodation sectors. Holiday-rental owners must stay informed about local council decisions and prepare to adapt their pricing and guest communications accordingly.