Edinburgh Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Edinburgh, UK?

Edinburgh, the capital city of Scotland, has recently introduced new regulations for short-term rentals like Airbnb and VRBO. These rules aim to address the impact of the growing short-term rental market on the city's housing supply and quality of life for residents. Here's what you need to know about the current short-term rental regulations in Edinburgh.

Starting a Short-Term Rental Business in Edinburgh

As of October 1, 2022, all operators of short-term lets in Edinburgh must apply for a license from the City of Edinburgh Council. New hosts who were not operating before this date cannot take bookings or receive guests until they obtain a license. Existing hosts who were already providing short-term lets before October 1, 2022, had until October 1, 2023, to apply for a license and can continue operating while their application is being considered.

There are four types of licenses available depending on the type of accommodation being offered:

• Secondary letting - letting a property where you do not normally live, such as a second home
• Home letting - using all or part of your own home for short-term lets while you are absent
• Home sharing - using all or part of your own home for short-term lets while you are there
• Home letting and home sharing - using all or part of your own home for short-term lets while you are living there and for periods when you are absent

In addition to the licensing requirement, properties being used for secondary letting (where the host does not normally live) may also require planning permission for change of use. This is because the entire city of Edinburgh has been designated as a "short-term let control area" as of September 5, 2022.

According to u/soporificoctopus, an Airbnb host in Edinburgh, the licensing process involves posting a public notice outside the property for 3 weeks, fire safety checks, and criminal background checks. Processing times for license applications can vary from 2 to 12 months.

Annual licensing fees for short-term lets in Edinburgh range from £120 to £5,869 depending on the number of occupants and type of let. Operators are also responsible for costs like gas and electrical safety certificates, insurance, and council tax.

While the new regulations have created additional hurdles for short-term rental operators in Edinburgh, the city remains a popular tourist destination. With careful planning and adherence to the licensing requirements, it is still possible to run a successful short-term rental business. However, some landlords are considering switching to long-term rentals due to the complexity and costs of the new system.

Short-Term Rental Licensing Requirement in Edinburgh

As of October 1, 2022, all operators of short-term lets in Edinburgh are required to apply for a license from the City of Edinburgh Council. This licensing requirement applies to both new hosts and existing hosts who were already providing short-term lets before the October 1, 2022 deadline.

New hosts who were not operating prior to October 1, 2022, cannot take bookings or receive guests until they have successfully obtained a license. Existing hosts who were already letting their properties before the deadline had until October 1, 2023, to apply for a license and can continue operating while their application is being considered.

There are four types of licenses available depending on the type of short-term let accommodation being offered:

1. Secondary letting - letting a property where you do not normally live, such as a second home
2. Home letting - using all or part of your own home for short-term lets while you are absent
3. Home sharing - using all or part of your own home for short-term lets while you are there
4. Home letting and home sharing - using all or part of your own home for short-term lets while you are living there and for periods when you are absent

Regardless of the license type, all hosts and operators in Edinburgh need to have a valid license by January 1, 2025. The licensing process involves submitting an application along with required documentation such as property floor plans, gas and electrical safety certificates, a fire safety checklist, and proof of planning permission for secondary letting.

Application fees for short-term let licenses in Edinburgh range from £120 to over £5,800 depending on the maximum number of guests and whether it is a temporary license. These fees are non-refundable, although hosts can request a refund in exceptional circumstances by contacting the Licensing Manager in writing.

In addition to the licensing requirement, properties being used for secondary letting may also need planning permission for change of use since the entire city has been designated as a "short-term let control area." This means that if a property is not the host's main residence, getting planning permission approved is very unlikely, especially for flats with shared communal areas.

The introduction of the licensing scheme aims to regulate the short-term rental market in Edinburgh, address issues like noise and antisocial behavior, and help return properties to the long-term housing supply. However, the complexity and costs of the new system have prompted some landlords to consider switching to long-term rentals instead.

Required Documents for Edinburgh Short-Term Rentals

When applying for a short-term let license in Edinburgh, hosts and operators need to provide several required documents as part of their application. These documents help ensure that the property meets safety standards and complies with local regulations.

The specific documents required may vary depending on the type of license being applied for (secondary letting, home letting, home sharing, or home letting and home sharing). However, the following documents are generally needed for all short-term let license applications in Edinburgh:

1. Floorplan of the property: A detailed floorplan showing the layout of the property, including the location of smoke and heat detectors, fire doors, and escape routes.
2. Gas safety certificate: A valid gas safety certificate issued by a Gas Safe registered engineer within the last 12 months, confirming that all gas appliances and fittings are safe to use.
3. Electrical Installation Condition Report (EICR): An EICR completed by a qualified electrician within the last 5 years, certifying that the property's electrical system is safe and compliant with current regulations.
4. Portable Appliance Testing (PAT) report: A PAT report showing that all portable electrical appliances provided for guests' use have been tested and are safe.
5. Fire safety checklist: A completed fire safety checklist confirming that the property has adequate smoke and heat detection, fire doors, and escape routes.
6. Proof of planning permission (for secondary letting): If the property is being used for secondary letting (where the host does not normally live), proof of planning permission for change of use may be required.
7. Proof of ownership or landlord's permission: Evidence that the applicant owns the property or has the landlord's permission to use it for short-term letting.
8. Public liability insurance:Proof of valid public liability insurance covering the short-term let, with a minimum indemnity of £5 million.
9. Criminal record check: A basic disclosure check for each person named on the application, showing any unspent convictions.

In addition to these documents, the City of Edinburgh Council may request further information or clarification during the application process. It is the responsibility of the host or operator to ensure that all required documents are valid, up-to-date, and submitted with their license application.

Failure to provide the necessary documentation or meet the required safety standards may result in the license application being rejected or delayed. Therefore, it is essential for hosts and operators to carefully review the requirements and gather all the required documents before submitting their short-term let license application in Edinburgh.

Edinburgh Short-Term Rental Taxes

In addition to obtaining a short-term let license, hosts and operators in Edinburgh are also responsible for paying various taxes related to their rental properties. These taxes help support local services and infrastructure, and failure to pay them can result in penalties and legal consequences.

The main taxes that apply to short-term rentals in Edinburgh are:

1. Income Tax: Hosts and operators must declare their rental income to HM Revenue and Customs (HMRC) and pay income tax on their profits. The amount of tax owed depends on the host's total income and tax bracket. Hosts can deduct allowable expenses, such as cleaning fees, utility bills, and maintenance costs, from their rental income to calculate their taxable profit.
2. Council Tax: Short-term rental properties in Edinburgh are subject to council tax, which is used to fund local services like schools, roads, and waste collection. The amount of council tax owed depends on the property's valuation band and the number of days it is available for let each year. Properties available for letting for 140 days or more per year are liable for council tax even if they are not occupied.
3. Non-Domestic Rates (Business Rates): If a property is available for let for 140 days or more per year, it may be considered a self-catering property and subject to non-domestic rates instead of council tax. The amount of non-domestic rates owed depends on the property's rateable value, which is based on its size, location, and rental income potential.
4. Value Added Tax (VAT): Hosts and operators who earn over £85,000 per year from their short-term rental business must register for VAT and charge it on their rental fees. The current standard VAT rate is 20%. Hosts who are registered for VAT can also reclaim VAT on eligible expenses related to their rental business.

It is important for hosts and operators to keep accurate records of their rental income and expenses, and to seek professional advice from a qualified accountant or tax specialist to ensure they are complying with all applicable tax laws and regulations.

Failure to declare rental income, pay the appropriate taxes, or keep proper records can result in penalties, interest charges, and even criminal prosecution in severe cases. Therefore, it is crucial for hosts and operators to understand their tax obligations and stay up-to-date with any changes in tax laws or rates that may affect their short-term rental business in Edinburgh.

UK Wide Short-Term Rental Rules

While the Scottish Government has granted local authorities the power to regulate short-term rentals through licensing and planning permission, the rules in England are still evolving. In February 2024, the UK Government announced plans to introduce new measures to regulate the short-term rental market in England.

These proposed changes include the creation of a mandatory national registration scheme for short-term rental properties. Under this scheme, hosts and operators will be required to register their properties with the local council and provide essential information about the property and its ownership. This aims to improve transparency and enable local authorities to better monitor the impact of short-term rentals on local communities.

In addition to the registration scheme, the UK Government also plans to introduce a new planning use class for short-term rentals in England. This means that properties being used primarily for short-term letting may require planning permission for a change of use. However, the details of how this will be implemented and enforced are yet to be finalised.

It's important to note that the new rules will not apply to homeowners who rent out their primary residence for 90 days or less per year. This exemption aims to strike a balance between regulating the short-term rental market and allowing homeowners to benefit from occasional short-term letting.

The UK Government's announcement comes in response to growing concerns about the impact of short-term rentals on local housing markets, particularly in areas with high tourist demand. By introducing a registration scheme and potential planning requirements, the government hopes to address issues such as reduced housing supply for long-term residents and the potential for anti-social behaviour associated with some short-term lets.

As the proposed changes are still in the early stages, the exact timeline for implementation and the full details of the new rules are yet to be confirmed. However, it is expected that the registration scheme and planning reforms will be introduced in England from the summer of 2024 onwards.

While the new UK-wide rules will provide a framework for regulating short-term rentals in England, it is likely that local authorities will still have some flexibility to adapt and enforce the rules based on their specific needs and circumstances. As such, short-term rental hosts and operators in England should stay informed about both the national regulations and any additional measures implemented by their local council.

Does Edinburgh Strictly Enforce STR Rules?

Based on discussions among short-term rental hosts on forums like Bigger Pockets and Reddit, it appears that Edinburgh has been strictly enforcing its short-term rental regulations compared to many other cities. The introduction of the citywide short-term let control area in September 2022 and the requirement for all hosts to obtain licenses by October 2023 have made it much more challenging to operate STRs in Edinburgh, especially for those letting out entire properties that are not their primary residence.

Many hosts have reported difficulties in obtaining the necessary licenses and planning permissions under the new system. The application process is complex, costly, and time-consuming, with some waiting several months for a decision. Anecdotally, it seems the vast majority of applications for secondary letting (renting a whole property you don't live in) in tenement buildings are being rejected by the council.

As a result, a significant number of STR operators in Edinburgh have been forced to cease trading or switch to long-term rentals. While there are undoubtedly some hosts continuing to operate without the proper licenses, doing so carries serious risks. The council has pledged to ramp up enforcement against unlicensed short-term lets, with hefty fines and legal action for those caught flouting the rules.

Compared to other UK and European cities, Edinburgh's STR regulations are among the strictest. While London, Paris, and Barcelona have also introduced measures to curb the growth of short-term rentals in recent years, their policies are generally less severe than Edinburgh's blanket requirement for all hosts to obtain licenses.

Overall, the consensus among STR hosts is that Edinburgh is no longer a friendly place to operate, particularly for those relying on short-term letting as a main source of income. The high costs and low success rates associated with obtaining licenses and planning permissions, coupled with the council's firm anti-STR stance, have made it extremely difficult to run a viable short-term rental business in the city.

For occasional hosts renting out a room in their own home or their entire property for a few weeks a year while on holiday, the impact is less dramatic. However, they too must navigate the new licensing system to ensure compliance. It's clear that Edinburgh has prioritized protecting residential housing supply and quality of life for local residents over supporting the growth of the STR sector.

How to Start a Short-Term Rental Business in Edinburgh

Despite the strict regulations, it is still possible to start a short-term rental business in Edinburgh if you carefully follow the necessary steps and comply with all legal requirements. Here is a numbered list of steps to help you get started:

1. Determine the type of short-term let you want to offer (secondary letting, home letting, home sharing, or home letting and home sharing) based on your property and personal circumstances.
2. Check if you need planning permission for your intended use. If you plan to do secondary letting (renting out a property you don't live in), you will likely need to apply for a "change of use" planning permission.
3. Ensure your property meets all safety requirements, including adequate smoke and carbon monoxide detectors, fire doors, and safe electrical and gas installations. Arrange for necessary home inspections and certifications.
4. Apply for a short-term let license from the City of Edinburgh Council, submitting all required documents such as floorplans, safety certificates, and proof of planning permission (if applicable). Be prepared to pay the license fee and wait several weeks or months for a decision.
5. Once you have obtained your license, set up your listing on platforms like Airbnb or VRBO, ensuring you comply with their terms of service and provide accurate information about your property and the local regulations.
6. Establish a system for managing bookings, cleaning, and maintenance. Consider using a professional property management service if you don't have the time or expertise to handle these tasks yourself.
7. Implement a guest screening process to minimize the risk of disruptive or illegal behavior. Clearly communicate your house rules and expectations to guests before and during their stay.
8. Keep detailed records of your rental income and expenses, and ensure you are paying all applicable taxes, including income tax, council tax or non-domestic rates, and VAT (if applicable).
9. Stay informed about any changes to local regulations or licensing requirements, and renew your short-term let license annually as required.
10. Foster positive relationships with your neighbors and local community by being a responsible host and addressing any concerns or complaints promptly and professionally.

By following these steps and maintaining a commitment to compliance and best practices, you can build a successful and sustainable short-term rental business in Edinburgh. However, be prepared for a significant investment of time, money, and effort to navigate the complex regulatory landscape and stand out in a competitive market.

Who to Contact in Edinburgh about Short-Term Rental Regulations and Zoning?

If you have questions or need assistance regarding short-term rental regulations and zoning in Edinburgh, there are several key contacts you can reach out to:

City of Edinburgh Council Licensing Department
Email: licensing@edinburgh.gov.uk
Phone: 0131 529 4208
Address: 249 High Street, Edinburgh, EH1 1YJ

The Licensing Department handles all aspects of the short-term let licensing scheme, including processing applications, issuing licenses, and enforcing compliance. They can provide guidance on the licensing process, fees, and requirements.

City of Edinburgh Council Planning Department
Email: planning@edinburgh.gov.uk
Phone: 0131 529 3550
Address: Waverley Court, 4 East Market Street, Edinburgh, EH8 8BG

The Planning Department is responsible for handling planning permission applications for short-term lets, particularly for secondary letting (renting out a property you don't live in). They can advise on whether planning permission is required for your specific situation and guide you through the application process.

Scottish Government Short-Term Lets Team
Email: shorttermlets@gov.scot

While not directly involved in the day-to-day administration of Edinburgh's short-term rental regulations, the Scottish Government's Short-Term Lets Team can provide general information and guidance on the national legislation and policies that underpin the local licensing schemes.

In addition to these official contacts, there are also several industry associations and community groups that can offer advice and support for short-term rental hosts in Edinburgh:

Association of Scotland's Self-Caterers (ASSC)
Website: https://www.assc.co.uk/
Email: enquiries@assc.co.uk
Phone: 01556 505050

Edinburgh Short Term Lets Association (ESTLA)
Website: https://www.estla.co.uk/
Email: info@estla.co.uk

These organizations can provide valuable insights into best practices, industry trends, and advocacy efforts related to short-term rentals in Edinburgh and across Scotland.

By engaging with these key contacts and resources, short-term rental hosts and operators in Edinburgh can ensure they stay informed about the latest regulations, requirements, and opportunities in this dynamic sector.

What Do Airbnb Hosts in Edinburgh on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions among Airbnb hosts on Reddit and Bigger Pockets forums, there is a general consensus that Edinburgh has implemented some of the strictest short-term rental regulations in the UK. Many hosts express frustration and concern about the impact of these rules on their ability to operate profitable short-term rentals in the city.

On the Edinburgh subreddit, several hosts have shared their experiences navigating the new licensing and planning permission requirements. For example:

u/soporificoctopus described the licensing process as involving "posting a public notice outside the property for 3 weeks, fire safety checks, and criminal background checks." They noted that application processing times can range from 2 to 12 months. (Source: )

Another host lamented that "the vast majority of applications for secondary letting (renting a whole property you don't live in) in tenement buildings are being rejected by the council." (Source: )

Some hosts report having to spend thousands of pounds to bring their properties up to the new safety standards required for licensing. One post cheered sarcastically, "How dare they be legally required to keep their rental property up to a safe standard for human habitation!" (Source: )

On Bigger Pockets, while there are fewer discussions specific to Edinburgh, hosts and investors express similar sentiments about increasing regulations on short-term rentals in cities worldwide:

In a thread titled "Airbnb's and STR's Regulations," the original poster noted that many cities and counties are passing laws restricting short-term rentals to owner-occupied properties only. They asked, "What does this mean for people who are planning to start an Airbnb business? Game over?" (Source: )

Replying to a question about Airbnb arbitrage (renting a property long-term to then re-rent on Airbnb), one host advised the OP to carefully research city laws and HOA rules, as "it's reasonable to assume these laws are coming" to more areas. (Source: )

Overall, while some Edinburgh hosts continue to operate short-term rentals, many are pessimistic about the future of Airbnb in the city given the increasingly restrictive regulatory environment. The general advice is to thoroughly understand the licensing requirements and associated costs before investing in a short-term rental property, as the rules have made it much more challenging to run a viable Airbnb business in Edinburgh compared to the past.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.