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Mayors and local leaders will be given new powers with a levy on overnight stays as part of a devolution drive to shift power out of Westminster.

More money could be invested into high streets, public transport, and events to boost tourism and drive good growth thanks to the latest shift of power from Whitehall and back into communities.

Mayors and local leaders will be handed the power to introduce an Overnight Visitor Levy – a fee on overnight stays – to help maximise the benefits of tens of millions of people visiting England every year.

The government will protect budget holidays by requiring the levy to be charged as a percentage of the cost of accommodation, rather than as a flat fee, shielding families from disproportionate costs for cheaper holidays.

The announcement follows the government’s consultation on proposals in 2025, and comes ahead of today’s Mayoral Council at No10 North which will discuss how the new powers can make more money available for their areas’ priorities.

This latest step in fiscal devolution will bring England in line with other countries where similar levies are in place, including in many cities in Germany, the United States, Italy, Netherlands, and Canada.

It will directly benefit England’s tourism hotspots by investing money back into their communities, which will support regional tourism, help manage the footfall of visitors, and improve areas for those living there.

Mayors and leaders of Foundation Strategic Authorities can decide whether to introduce a levy and how the revenue should be invested in their area, in consultation with their residents and local businesses.

This is the latest shift of power out of Westminster and back into communities where it belongs - including allowing mayors to keep a share of income tax, giving them a greater say over planning decisions and supporting the establishment of strategic authorities in every part of England.

Secretary of State for Housing, Communities and Local Government Angela Rayner, said:

Our amazing towns and cities, and our picturesque rural and coastal communities welcome millions of visitors every year – local leaders should have the power to make the most of that popularity.

This measure will give mayors the choice to raise and reinvest funding where it’s needed most. It’ll help support the local services, public spaces and attractions that both residents and visitors rely on, with decisions taken by people who know their area best.

Steve Rotheram, Mayor of the Liverpool City Region, said:

This is something I’ve been calling for over many years, so I’m really pleased the government is taking forward plans to give Mayors the power to introduce a visitor levy locally

Our visitor economy is already worth more than £6.8bn a year and supports more than 55,000 jobs across the Liverpool City Region. A modest levy on overnight stays could potentially raise up to £18m a year – money that would stay here and be reinvested directly into the events, culture, experiences and infrastructure that bring millions of visitors to our region.

Visitor levy mechanisms are often used in many great cities across the globe to improve the visitor offer and attract even more people to enjoy the experience.

It would give us more money to support the things that make our visitor economy such a success, while helping our businesses and communities to benefit from its continued growth.

We’ve shown time and again that local people know what our area needs far better than someone sitting behind a desk in Whitehall. I look forward to working with government as these powers are developed to make sure we get a system that is fair, workable and delivers the greatest possible benefit for our region.

Mayor of the East Midlands, Claire Ward said:

The East Midlands is an incredible place to visit, and people travel from miles away to enjoy the world-class sport and culture, beautiful countryside, thriving cities, market towns and historic places.

But none of these things – whether it is the natural beauty of the Peak District, our heritage buildings, or world class hospitality – will continue to attract visitors and improve their offer if we do not invest into them. The overnight visitor levy is a way that we can sustain investment – year after year – in the places and experiences that people will return to.

Having seen this work in other places around the world, I am confident that we can make it work here. But to ensure that happens, we will work with partners, businesses and stakeholders to understand what is right for our region, how a levy could be designed to match that, and how any money raised could have the greatest impact.

Mayor of London, Sadiq Khan, said:

I strongly welcome the Government giving London the power to introduce an Overnight Visitor Levy. This needs to happen sooner rather than later. London’s visitor economy is a huge success story, supporting jobs, businesses and investment across the capital and the wider country, and I have long argued that London should have the same flexibility as other major global cities to raise and invest funding locally.

A well-designed, modest levy has the potential to provide an important additional source of funding to support growth, strengthen London’s offer to visitors and help us remain globally competitive. It would allow us to reinvest in the places, infrastructure, culture and experiences that make London one of the world’s greatest cities to visit, while helping manage the pressures that come with welcoming tens of millions of visitors every year.

I will work closely with London’s boroughs, accommodation providers, hospitality and tourism businesses and other partners, before final decisions are taken.

Tracy Brabin, Mayor of West Yorkshire, said:

Devolution is delivering and it is right that Mayors get these new powers to introduce an overnight visitor levy. 

Our beautiful region has so much to offer; from Brontë Country to the Hepworth Gallery, the rolling moors to our bustling city nightlife, arts and theatre to beautiful architecture.  

By asking people to make a small contribution, like in many other European countries, we can continue to invest in culture, grow our economy and ensure people want to visit for generations to come.

Helen Godwin, Mayor of the West of England, said:

We are used to paying a visitor levy ourselves when we go on holiday to other countries, and now is the time to look at making sure we can invest more in what matters through a small charge on overnight stays here - with common-sense exemptions where we need them. 

The West Country has such an exciting future. New-and-improved and upcoming attractions like the Bristol Zoo Project and Aviva Arena can, with continued backing, be joined by more top-quality sites like Birnbeck Pier in Weston-super-Mare and Bath Fashion Museum. We know that local people also want to see further improvements to our transport network, particularly our buses. More late-night services would help more people enjoy what our region has to offer - and enable workers to get home more easily - and so would some more funding for public spaces including in central Bath and Bristol, alongside new support for the sectors that support tourism. 

Things like this become possible sooner if we raise new funding through an overnight visitor levy. We should grab the chance to take more control of our future with both hands, because a few quid here and there can add up to some big change.

South Yorkshire’s Mayor Oliver Coppard, said:

We have a huge amount to show off in South Yorkshire, from the world snooker championships to the St Leger. That’s why tourism now brings in £4bn to our economy every year, with that number only set to grow.

A Visitor Levy in South Yorkshire would simply bring us into line with many other comparable European Cities including our friends over in Manchester, meaning visitors to South Yorkshire will make a small contribution to the services they use. I’m pleased the government are giving us that power and allowing Mayors to decide what’s best for their own places. A tourism levy seems like a sensible first step on the road to more fiscal devolution.

David Skaith, Mayor of York and North Yorkshire, said:

It’s good to have more clarity on what an Overnight Visitor Levy would look like and how it might be applied. No decision will be made without a full public consultation and more engagement with the hospitality and tourism sector.

I know that people want to see improvements to our town and city centres, investment in our public services, and us showing off just how great our county is. That’s what money raised from a visitor levy will help us deliver.

Sir Tristram Hunt, Director of the V&A, who has been campaigning for a tourism levy 2018, said:

The Overnight Visitors Levy is a hugely welcome initiative and brings the UK into line with tourism destinations around the world.  It offers city mayors and local leaders across the UK a transformative chance to support museums, galleries and visitor attractions.  The culture sector now looks forward to working with mayors and councils to access much-needed investment to expand national and international audiences.

Laura Pye, Director of National Museums Liverpool, said:

Liverpool City Region has a vibrant and varied tourism offer, including arts, culture, music, sports, nightlife and more – which is one of the reasons it’s an increasingly popular choice for tourists.

Historically we are a city which embraces visitors from the world over. We’ve already seen through the Accommodation Business Improvement District (ABID) model the benefits for the visitor economy by being able to invest in marketing and cultural activities.

By building on this and working with our business communities, a Tourism Tax can continue to further improve the region for local people and tourists alike.

Andrew Carter, Chief Executive of Centre for Cities, said:

The Overnight Visitor Levy is a great step forward for fiscal devolution. This marks the first time that mayors in England have gained more autonomy over funding.

The Overnight Visitor Levy means places will get rewarded for doing what they need to attract more visitors and grow their local economies.

It’s good that the decision is left up to mayors because they know their areas best. Rightly, some will choose to introduce it, and some will decide it doesn’t suit their place.

This shows the importance of mayors to the economic agenda. It will now be up to them to ensure their visitor levy is set at the right rate and that they do what they need to fulfil the potential for growth in their local hospitality industry, alongside their new powers.

Local leaders will also have the flexibility to offer exemptions – such as for campsites - so they can tailor the levy to the specific needs of their area.

Temporary accommodation and shelters or refuges would not be subject to the levy, given they are clearly not used by visitors but are vital accommodation for vulnerable individuals and families.

Today’s announcement follows confirmation of government support for businesses that form the backbone of the tourism sector. Pubs, clubs and live music venues have benefited from a 20% cut in business rates, alongside a tax break on poured pints and a cap on Corporation Tax at 25%. A review of how hotels and pubs are valued for business rates has also been commissioned, reporting in time for decisions to be implemented at the next revaluation.

The government is also investing in domestic tourism with £3.38 million through VisitEngland’s Connected Destinations Fund, helping to bring areas together and improve visitor experiences of all parts of England.

Hotels and other accommodation providers will be responsible for paying the levy to strategic authorities and mayors. The government will work closely with them and local leaders to make sure it is as simple as possible to administer.

A bill will be introduced in due course to bring in the levy and government expects mayors and Foundation Strategic Authorities leaders to set out spending plans by early 2028. Separately, Foundation Strategic Authorities will have powers over transport and skills and local growth to ensure they are empowered to deliver for their areas.

For more information:

• This announcement follows a consultation on the overnight visitor levy which launched on 26 November 2025 and closed on 18 February 2026. 
• The government will provide strategic authorities with necessary powers to support the administration and collection of the levy. It also intends to pursue a clear and proportionate compliance framework for businesses, while enabling strategic authorities to design systems that reflect local circumstances and their approach to compliance and enforcement.
• The United Kingdom has invested less in its future than any other G7 country over the past three decades. Giving local leaders greater control over funding and investment decisions will help unlock opportunities that have too often been overlooked by a Whitehall-led approach.
• According to the latest Organisation for Economic Co-operation and Development (OECD), the level of national taxes collected at the ‘sub-national level’ is far below the European Union average and is the lowest in the G7. In contrast, countries such as France, Japan, and the USA have much higher shares of local tax collection, enabling greater local investment.
• OECD research has also found that enhanced fiscal decentralisation is associated with higher economic growth – suggesting that doubling the share of tax or spending controlled by subnational governments is associated with an increase in national GDP per capita by 3% on average.
• VisitBritain found that there were 42.6m inbound visits to the UK in 2024 with the visitors spending a total of £32.5bn and staying for a total of 293 million nights in the UK.