England’s regional mayors may soon acquire the authority to impose unlimited fees on overnight stays, covering hotels and short-term rentals, through upcoming legislation set to be introduced in Parliament within the coming months. The UK government has abandoned its earlier plan for a nationwide cap, instead permitting local leaders to establish rates without central restrictions—a departure from previous suggestions that included potential limits.
The decision stems from a consultation process initiated in November 2025, which explored whether to enforce caps on levies and how collections would function. While no official implementation timeline has been announced, local governments must detail how collected funds will be allocated by March 2028. Housing Secretary Angela Rayner discussed the proposal with regional mayors in Manchester on Thursday, though no definitive choices have been finalized.
London is understood to favour a levy calculated as a percentage of accommodation costs rather than a fixed nightly charge. Sources from the mayor’s office said that no decision had been made on the final structure, although any levy introduced in the capital would not exceed five per cent. Funds generated would remain within the region, supporting transportation, tourism infrastructure, and cultural initiatives. However, trade associations have voiced apprehensions, claiming that unrestricted local fees could increase costs for domestic tourists and burden businesses.
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UKHospitality estimates that a five per cent levy applied across England could result in 33,000 job losses and reduce economic activity by £2 billion. The organisation also warned that tourism-dependent destinations and businesses operating during quieter shoulder seasons could be particularly exposed. Allen Simpson, chief executive of UKHospitality, said holidays in the UK were already comparatively expensive due to existing taxes and warned that allowing mayors to set rates without a national limit could affect demand.
Other parts of the UK have already adopted comparable measures. Edinburgh began applying a five per cent charge in July, while councils in Wales will be able to charge most overnight visitors £1.30 per person from April 2027. Manchester became the first city in the UK to introduce a tourist tax back in 2023. The England proposals still require parliamentary approval before regional authorities can enforce them.
