Edinburgh tourist tax to support construction of nearly 500 affordable homes

Edinburgh City Council has revealed plans to construct nearly 500 affordable homes using revenue generated from the city's new tourist tax. A 5 million funding allocation for 472 homes has been approved by the Housing, Homelessness, and Fair Work Committee, covering the period from 2026/27 to 2028/29. The visitor levy, set at 5% for hotels, bed and breakfasts, and self-catering accommodations, is set to take effect on July 24, 2026. This marks the first planned use of the anticipated 50 million that the city is expected to generate annually from the tourist tax.

The 5 million Housing Tourism Mitigation Fund will support the construction of three new housing projects at Fountainbridge, Meadowbank, and Coatfield Lane in Leith. Approximately 360 of the homes will be designated for social rent, while around 110 will be available at mid-market rent prices. Jane Meagher, the Council leader, emphasized the significance of channeling this funding into housing. She pointed out that many individuals working in Edinburghs thriving tourism and cultural sectors often struggle to secure affordable housing in the city, making it challenging for them to live near their workplaces.

Meagher also noted that the Council had declared a housing emergency, with a growing number of people seeking housing assistance and not enough social housing to meet the demand. As a result, many residents are forced to rely on temporary accommodation, such as bed and breakfasts or hotels, which further reduces the capacity available for tourists.

The investment is still subject to final approval at the Councils budget meeting scheduled for February 26.

Edinburgh is set to become the first city in Scotland to implement a tourist tax.

Author: Harper Simmons