Edinburgh visitor levy to fund almost 500 affordable homes

Edinburgh council plans to build almost 500 affordable homes using funds raised from the city’s tourist tax.

The £5m funding pot for 472 homes between 2026/27 and 2028/29 was approved by councillors on the housing, homelessness and fair work committee.

The city’s visitor levy of 5% on hotels, bed and breakfasts and self-catering accommodation will take effect from 24 July 2026.

It is the first planned spend from the £50m expected to be raised annually from the Edinburgh visitor levy.

The £5m Housing Tourism Mitigation Fund plans include three new-build developments at Fountainbridge, Meadowbank and Coatfield Lane in Leith.

About 360 of the homes would be social-rented and about 110 would be mid-market rent homes.

Jane Meagher, the leader of City of Edinburgh Council, said it was important for the funding to go into a housing fund.

“Many of those working in our city’s thriving visitor economy and cultural sectors are often unable to find affordable housing in the city, making it difficult for them to live close to where they work,” she said.

“In addition, the council has declared a housing emergency, with more and more people presenting as homeless and not enough social homes available to meet this demand, and so too many residents have to use temporary accommodation, often in bed and breakfasts or hotels, taking vital capacity away from what should be tourist accommodation.”

The investment is subject to final approval from councillors at the council’s budget meeting on 26 February.