Overnight Visitor Levy Bill: What the King's Speech means for UK short-term rental owners

On 13 May 2026, King Charles III delivered the third King's Speech of the Labour government – and tucked into the 37 new bills was one with major implications for every short-term rental operator in England: the Overnight Visitor Levy Bill.

The bill will give English mayors – and potentially other local leaders of Foundation Strategic Authorities – the power to introduce a tourist tax on overnight accommodation, including hotels, B&Bs, guest houses, and holiday lets. It brings England closer to where Scotland and Wales already are, and where most of Europe has been for years.

Here's what the bill actually does, where it leaves UK short-term rental owners, and what you should do about it now.

Key takeaways

• The Overnight Visitor Levy Bill was announced in the King's Speech on 13 May 2026, included alongside 37 other new bills in Labour's legislative programme.

• It gives English mayors the power to impose a tourist tax on overnight stays in hotels, holiday lets, B&Bs, guest houses, and Airbnb-style accommodation.

• The bill doesn't set a single national rate. Each mayor or local authority will decide whether to introduce a levy, and at what level.

• Cities expected to be first in line include London, Manchester, and Liverpool. Other mayoral authorities are likely to follow.

• Revenue will be ring-fenced for transport, infrastructure, and local public services.

• The legislation brings England into line with Scotland and Wales, both of which already have visitor levy frameworks in place.

• Industry response has been measured but concerned – ABTA, UKHospitality, and others have flagged the cumulative tax burden on an already cost-competitive market.

  
  

What the bill actually does

The Overnight Visitor Levy Bill is enabling legislation. It does not impose a tax directly. Instead, it grants powers to local authorities – specifically mayors of combined authorities and Foundation Strategic Authorities – to introduce their own levies if they choose.

What this means in practice:

• Each mayoral region decides for itself whether to introduce a levy, and at what rate.

• The rate and structure can vary by area. Some may use a percentage of the room rate (as in Edinburgh), others a flat per-person-per-night charge (as in Wales).

• Accommodation in scope includes hotels, B&Bs, guest houses, hostels, serviced apartments, holiday lets, and short-term rentals listed on platforms like Airbnb and Booking.com.

• Funds raised are ring-fenced for local reinvestment, including transport, infrastructure, and tourism-related services.

  
  

The next stage is the bill passing through Parliament, after which secondary legislation and local consultations will determine which authorities introduce levies and how.

How does this compare to Scotland and Wales?

England is now following a path already laid by other UK nations.

Scotland. The Visitor Levy (Scotland) Act 2024 allowed councils to impose a percentage-based levy on overnight accommodation. Edinburgh is the first to implement: from 24 July 2026, a 5% charge will apply to the pre-VAT cost of paid overnight stays, capped at the first five nights. It covers hotels, serviced apartments, guest houses, hostels, and short-term lets.

Wales. Cardiff Council voted on 26 March 2026 to implement Wales's visitor levy, which is set by the Welsh Government at £1.25 per person, per night.

England. The Overnight Visitor Levy Bill creates the framework for the same powers to flow to English mayoral authorities. Specific rates have not yet been set – that decision sits with each mayor or authority.

For STR owners with properties in multiple UK nations, the practical takeaway is that you may soon be operating under three different visitor levy regimes, each with its own rate, structure, and compliance requirements.

What this means for short-term rental owners

The bill is significant for the STR sector for three reasons.

1. It explicitly includes short-term rentals.

Earlier iterations of "tourist tax" debates often focused on hotels alone. The Overnight Visitor Levy Bill is clear that holiday lets and Airbnb-style accommodation fall within scope. There is no expectation that STRs will be exempt.

2. It introduces collection and remittance obligations.

In Edinburgh, Cardiff, and most European visitor levy systems, the accommodation provider is responsible for collecting the levy from guests and remitting it to the local authority. STR owners and property managers should expect to do the same – adding a new administrative and accounting burden.

3. It compounds existing cost pressures.

UK short-term rentals are already navigating the abolition of the Furnished Holiday Lettings tax regime, Making Tax Digital changes, business rates reform, rising National Insurance contributions, and continuing cost-of-living-driven pricing pressure. A visitor levy adds another line item on guest bills.

UKHospitality has calculated that a 5% levy similar to Edinburgh's would create an "effective" consumer tax rate of around 27% once VAT is applied both to the room rate and to the levy itself. The trade body estimates this would add about £518 million per year to the cost of domestic trips for British travellers.

What the industry is saying

ABTA's Director of Public Affairs, Luke Petherbridge, responded the day of the announcement, calling the inclusion of reinvestment provisions "encouraging" while flagging the broader concern:

"We've long expressed concern with the cumulative impact of taxes and charges on UK travel and tourism, which is already uncompetitive on cost grounds. A visitor levy further adds to this."

ABTA confirmed it will engage with local mayors to advocate for ring-fenced funds being directed at tourism promotion and visible local improvements, rather than absorbed into general budgets.

UKHospitality, the Tourism Alliance, the UK Short Term Accommodation Association (STAA), and PASC UK have all previously expressed reservations about the introduction of visitor levies – particularly around the cost-of-compliance burden on smaller operators and the risk to domestic tourism competitiveness.

The Government has positioned the bill as bringing England into line with Scotland, Wales, and "several other European countries" where visitor levies have been standard for decades.

What STR owners should do now

The bill is at an early legislative stage. Specific rates and timings won't be confirmed until individual mayors begin local consultations. But there are practical steps owners can take now.

1. Identify whether your property sits in a mayoral authority area. London (Mayor of London), Greater Manchester, Liverpool City Region, the West Midlands, Yorkshire, the North East, and others all have mayors. Properties in these areas are most likely to be first in line.

2. Engage with local consultations early. Once the bill passes, local authorities will run consultations before introducing levies. Industry bodies (STAA, PASC UK, the Tourism Alliance) will be coordinating responses – adding your voice gives operators a stronger collective position.

3. Review your pricing strategy and guest comms. If a levy is introduced in your area, you'll need to decide how to display the charge (separately at checkout vs. bundled into rates), how to communicate it to guests pre-booking, and how to handle it in your PMS and OTA listings.

4. Plan for collection and remittance. Speak to your accountant about how levy collection will interact with your existing VAT and tax workflows. Most PMS providers will eventually build levy handling into their platforms – but early adopters in Edinburgh and Cardiff have had to build manual workarounds.

5. Stay close to the trade bodies. The most up-to-date information will flow through the STAA, PASC UK, the Tourism Alliance, and ABTA. If you're not already a member of one, this is a good time to consider it.

Frequently asked questions

When will the Overnight Visitor Levy actually come into force?

The bill was announced on 13 May 2026 and must pass through Parliament before becoming law. After that, individual mayoral authorities will need to run local consultations and pass their own secondary legislation. Realistic first implementation dates in England are likely 2027 at the earliest – but no firm timeline has been set.

Will all English short-term rentals be subject to a levy?

Not automatically. The bill gives mayors the power to introduce a levy in their area. Properties in non-mayoral areas or in regions whose mayors choose not to introduce a levy will not be affected. Properties in major cities like London, Manchester, and Liverpool are most likely to be affected first.

How much will the levy cost guests?

The rate is set locally. For reference, Edinburgh has set a 5% charge on pre-VAT accommodation cost (capped at five nights), and Wales has set a flat £1.25 per person, per night. English rates are not yet set.

Who collects the levy – the platform or the owner?

In most jurisdictions where visitor levies operate, the accommodation provider is responsible for collecting and remitting the levy. OTAs may collect on behalf of hosts in some cases – but the legal responsibility typically sits with the operator. Final collection mechanics will be set out in secondary legislation.

Does this affect Furnished Holiday Lettings differently?

The Overnight Visitor Levy Bill is a separate piece of legislation from the recent tax changes affecting Furnished Holiday Lettings. Both apply on top of existing income tax, VAT (where applicable), and business rates obligations.

What can I do as an STR owner to influence the outcome?

Engage with industry bodies (STAA, PASC UK, Tourism Alliance), respond to local consultations once they open, and consider speaking to your local MP or mayoral office. Collective industry response carries more weight than individual representations.

What happens next

The Overnight Visitor Levy Bill now begins its passage through Parliament. The Government's full report on the original consultation is still awaited. Once the bill passes, local mayoral authorities will begin their own consultations and decide whether and how to implement levies in their regions.

Host Planet will continue to track the bill's progress and publish updates as specific rates, timelines, and collection mechanisms become clear. If you operate STRs in mayoral authority areas – particularly London, Manchester, Liverpool, the West Midlands or the North East – this is one to watch closely.