Visitors staying overnight in London could soon be required to pay a new tourism tax, with authorities confirming the levy will be capped at 5% of accommodation costs under proposed legislation.
The new framework would give local authorities the power to introduce a visitor levy on both domestic and international guests staying in hotels and other forms of accommodation across the capital. Councils would be able to charge either a flat fee or a percentage of the cost of an overnight stay, although the exact rate has yet to be finalized.
London Mayor Sadiq Khan welcomed the government’s decision, saying the measure would bring London in line with many major global destinations that already charge tourism taxes. He indicated that any levy introduced in the capital would not exceed 5% per night.
Supporters of the proposal argue that the additional revenue could help fund improvements to tourism infrastructure, public services, and initiatives aimed at maintaining London’s appeal as one of the world’s leading travel destinations.
Under the legislation, local leaders would also have flexibility in how the levy is applied. Authorities could introduce exemptions for certain groups of visitors and choose to implement the tax in specific areas while excluding others. Proposed rules would also allow members of a combined authority to block the introduction of a levy through a two-thirds majority vote.
The move would align England with Scotland and Wales, where local authorities already have powers to introduce similar visitor taxes. Tourism levies are also common in major cities around the world, including New York, Los Angeles, Chicago, and Paris.
If approved, the new visitor tax would mark a significant change for London’s tourism sector, creating a new source of revenue while potentially impacting accommodation costs for millions of travelers each year.
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