Council tax, rates and running costs for Edinburgh short lets

An Edinburgh second home that does not qualify for non-domestic rates pays double council tax as of September 2026, and the council has decided to raise that to four times the normal bill from 1 January 2027. For a short let that is not let often enough, that one bill can wipe out much of the profit.

Here is how the charges work, and how they fit with the other costs of running a short let in Edinburgh.

What is Edinburgh's second home premium?

The council defines a second home as a property that is furnished, lived in for at least 25 days in a 12-month period, and not someone's sole or main residence.

Since April 2024, second homes in Edinburgh have paid the standard council tax plus a 100% premium, so double the normal bill. The premium was due to rise to 300% on 1 April 2026, but the council suspended that increase and sent revised bills for 2026/27 at the 100% rate.

At a meeting on 27 August 2026, the council decided to raise the premium from 100% to 300% from 1 January 2027. From that date, the bill will be four times the standard rate. Affected owners should expect a revised bill in December 2026. The water and sewerage charge is not affected by the premium.

The council says the aim is to bring homes back into use during the housing emergency it declared in November 2023. The council has also adopted Scottish Government guidance on when the premium may not be appropriate, and owners can ask it to use its discretion. If you think your home has been wrongly classed as a second home, the council asks you to email its second homes team and explain why.

When do non-domestic rates apply instead?

A self-catering property can move off council tax and onto non-domestic rates, which is the Scottish name for business rates. The Scottish Government explains that a dwelling available to let for 140 days and actually let for 70 days or more in the financial year is classed as self-catering holiday accommodation. It then pays non-domestic rates instead of council tax.

If it does not meet both thresholds, it stays on council tax, and in Edinburgh that means the second home premium.

The decision sits with the local Assessor, not the council tax team. The Scottish Government's guidance explains how to ask the Assessor to consider your property, using the self-catering form on the Scottish Assessors Association website.

Can you get small business rate relief?

Many self-catering properties on non-domestic rates pay little or nothing because of the Small Business Bonus Scheme. The Scottish Government reported that in July 2022, 88% of self-catering units on the valuation roll received the relief, and most of those received 100% relief. Relief rules change, so check your own position each year.

Why does planning come first?

Rates only help if you can let the property lawfully. A whole second home in Edinburgh needs planning permission to be used as a short let, and most applications are refused. Read Edinburgh's short-term let control area explained before you work out any figures.

What other running costs are there?

Licence fees. A secondary letting licence costs from £653 a year for a home sleeping up to 3 guests, and more for larger homes. Home letting costs £120 per guest for a new licence. See short-term let licence in Edinburgh.

The visitor levy. You collect 5% on the first 5 nights of each paid stay and pay it to the council. You keep 2% of the levy you collect to cover your costs. See the Edinburgh visitor levy explained.

Safety certificates. Gas, electrical and appliance checks, a fire safety checklist and suitable insurance are part of every licence.

Income tax. The furnished holiday let tax regime was abolished on 6 April 2025. Short-let income is now taxed under the normal landlord rules, after allowable costs. Speak to an accountant about your own position.

How do the costs add up?

Before you decide, list the costs you pay whether or not a guest books:

1. Council tax with the premium, or non-domestic rates if you qualify.
2. The licence fee, spread over the years it covers.
3. Safety checks, insurance, utilities and broadband.
4. Your time, or a manager's fee, to run the bookings and the levy.

Then set them against realistic earnings. For a home that can be let lawfully, the festivals in August and at Hogmanay do much of the heavy lifting. See our Edinburgh festivals calendar for hosts.

Which records should you keep?

Keep a record for each financial year of every night the home was available to let, every night it was actually let, and the price charged. The Assessor can ask for evidence of both, and the same records support your levy returns and your tax return.

What does this mean for you?

• An Edinburgh second home that misses the 140 and 70-night test pays double council tax now, and four times from 1 January 2027.
• A lawful short let that meets the test moves to non-domestic rates, often with relief.
• Check planning first, because none of the savings matter if the let is not allowed.

Check the numbers for your home

Our Edinburgh Airbnb management team will show you likely earnings after fees and the levy, so you can weigh them against these costs. Get your free valuation and an honest view of whether short letting makes sense for your home.

Get my free valuation

This is general information, not legal or tax advice. It is our own interpretation of the rules and figures as they stand on the date shown above, and they can change. Speak to a qualified solicitor or accountant before you act on anything here.