London Considers Tourist Tax on Hotel and Short-Term Rental Stays
London is evaluating the implementation of a new tax targeting overnight visitors, perhaps impacting hotel guests and those utilizing short-term rentals. Mayor Sadiq Khan is reportedly exploring the levy as a means to bolster the local economy and gain greater fiscal autonomy for the capital.
A spokesperson for the mayor confirmed Khan has been considering “a modest tourist levy,similar to other international cities,” as reported by the Local Democracy Reporting Service. The potential tax is enabled by a clause within the English Devolution and Community Empowerment Bill, which allows local leaders to ”raise revenue locally through a new overnight visitor levy.”
While specific details remain unconfirmed, estimates suggest the levy could be set at 5% per night. Andrew Carter, chief executive of Center for Cities, stated the tax “is the start of a bigger [program] of devolving tax and spending powers to the capital,” adding that London’s economic strength warrants increased fiscal control.
The move comes as numerous destinations grapple with overtourism and seek new revenue streams. Similar levies are already in progress or have been implemented elsewhere: aberdeen, Scotland, approved a 7% visitor levy beginning April 1, 2027; Edinburgh plans a 5% per night tax starting July 2026; and Norway has introduced a 3% tax in tourism-heavy areas. Greece is planning a $22 tax for cruise visitors to santorini and Mykonos, while venice piloted a $5.17 entry fee for day-trippers in 2024 and is considering doubling the charge.
