England plans to introduce a new tax on overnight stays from 2028, giving regional mayors the power to charge visitors staying in hotels, holiday rentals, and campsites. Accommodation providers who deliberately evade the levy could face up to 14 years in prison, a £20,000 fine, or both.
A New Tax That Could Affect Millions of Visitors
According to The Telegraph, the proposed overnight visitor levy would allow England’s regional authorities to collect a percentage of accommodation costs, with revenues remaining in the communities where they are raised.
The levy would apply to hotels, bed-and-breakfast establishments, holiday rentals, and potentially camping facilities. Unlike fixed nightly charges used in some European cities, England’s proposed system would calculate payments according to the total price of a stay.
Angela Rayner, the Housing Secretary, defended the measure on Wednesday:
“Millions of people visit our wonderful towns and cities each year, and it’s right that our communities should be able to feel the benefit of that footfall. Every pound raised through these levies will stay in the local area.”
Although the legislation does not establish a nationwide maximum rate, ten Labour metro mayors, including Sadiq Khan and Bev Craig, have pledged to limit charges to 5% in their regions.
Dodge paying tax on your property? Angela Rayner will send you to prison for 14 years. But when she dodges tax on her property, no prison time for her. She pockets a golden goodbye payment instead. And she’s back in the same job nine months later. https://t.co/huapYinLwD
— Tom (@tomwhx) November 5, 2026
Severe Penalties and New Rules for Discounted Stays
The proposed legislation includes enforcement measures comparable to those used against VAT evasion. Providers who deliberately misrepresent whether guests owe the levy or fail to remit collected payments could face criminal penalties.
The rules would also address discounted accommodation offered to friends and relatives, commonly called “mates rates.” Such arrangements would not automatically allow property owners to avoid the full tax liability.
The proposals have prompted criticism from opposition Conservatives.
Katie Lam, the shadow housing secretary, said:
“Not content with increasing the cost of people’s hard-earned holidays, this Labour Government is cracking down on discounts, too.
“The idea that people could spend 14 years in prison for failing to comply with this is completely deranged.
“At a time when families are already struggling to afford the basics, the last thing they need is another Labour-imposed cost eating into their budgets.
“Conservative mayors have made clear that they will not introduce the holiday tax, and a Conservative government would reduce business rates for hospitality and leisure businesses, helping to safeguard jobs, support local businesses and make sure that British holidays remain affordable and accessible for everyone.”
The Ministry of Housing has stressed that minor administrative errors would not result in imprisonment and that serious enforcement cases should be rare.
Who Will Pay and Which Stays Are Exempt?
The levy would cover the first 28 consecutive days of an overnight stay. Longer visits would fall outside the charge because they would qualify as long-term accommodation.
Tents, caravans, motorhomes, and camper vans would also fall within its scope unless individual mayors introduced exemptions.
Certain noncommercial accommodations would remain exempt nationwide.
Jim McMahon, the communities minister, explained in response to a written parliamentary question:
“National exemptions will apply to non-commercial accommodation or land uses.
“This includes Gypsy, Roma and Traveller sites, temporary accommodation, and charitable accommodation for shelter or refuge.”
Scout camps and hostels would also receive exemptions.
People occasionally renting spare rooms could become liable once their earnings exceed locally determined thresholds.
The model follows visitor taxes already operating in Edinburgh, Barcelona, Paris, Milan, Vienna, and Budapest. In England, Conservative and Reform mayors have opposed introducing the levy, while Labour mayors have committed to limiting their regional rates to 5%.
