Landlords who rent out properties through Airbnb and other short-term accommodation platforms will be responsible for collecting the proposed Visitor Levy under new legislation introduced in the House of Commons.
The Visitor Levy Bill would give local mayors and, in certain circumstances, councils the power to introduce a charge on overnight stays. Local authorities would also be able to decide how much visitors should pay if they choose to bring in the levy.
Ten mayors have already indicated that any charge introduced in their areas would be capped at 5%.
How the Visitor Levy will work
The proposed levy will apply to the first 28 consecutive days of a visitor’s stay. Accommodation booked for longer periods will be treated as long-term stays and will therefore fall outside the charge.
There will also be a threshold for occasional landlords who only rent out accommodation from time to time, such as a spare bedroom in their home. These hosts will only need to collect the levy if their earnings exceed a specified amount.
Local mayors and leaders will have the authority to change this income threshold to reflect local circumstances.
Several types of accommodation will be excluded from the proposed charge. These include student housing, care homes, children’s homes, school boarding facilities, temporary accommodation, shelters and refuges.
However, most short-term rental properties are expected to fall within the scheme if the legislation becomes law.
Who will be responsible for collecting the levy?
The responsibility for collecting and passing on the Visitor Levy will generally fall to the person or business managing the short-term accommodation and handling guest payments.
This means landlords who manage their own bookings and payments will need to collect the charge from visitors. Where an agent manages the property and handles payments on the landlord’s behalf, the collection responsibility will sit with that agent instead.
Further guidance is still expected from the Ministry of Housing, Communities and Local Government, which is leading the development of the new tax. This should provide more information on how the levy will be administered and what landlords and accommodation providers will need to do to comply.
Government says revenue will benefit local communities
Housing Secretary Angela Rayner says the proposed levy will allow popular visitor destinations to benefit financially from the people who stay in their towns and cities.
The Government intends for all revenue raised to remain within the local area, helping fund improvements such as public transport, high streets and visitor attractions.
The proposals are also intended to give mayors and local authorities greater control over how tourism revenue is spent, while taking account of affordable accommodation and allowing businesses to contribute to decisions.
For landlords operating holiday lets and other short-term rentals, the proposed changes could introduce additional administrative responsibilities. Those managing their own bookings may need to review their payment processes to ensure the levy is collected correctly if their local authority decides to introduce it.
As the Bill progresses through Parliament, landlords will need to keep an eye on further announcements about the final rules, local rates and collection requirements.
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