The 'Airbnb tax' is coming - and we think that's good news

The new Overnight Visitor Levy, capped at 5% of the accommodation bill, will squeeze amateur operators out of the short let market. Here's why that's exactly what professional management needed.

On 10th September, the Government handed mayors and local leaders across England a new power: the Overnight Visitor Levy - a charge on overnight stays, better known as the tourist tax or, if you're being blunt about it, the Airbnb tax. Within hours, mayors in city regions from London to Greater Manchester, Liverpool and York had confirmed they intend to use it.

The design matters. The levy will be charged as a percentage of the accommodation bill rather than a flat fee, so cheaper stays pay proportionally less. There's no statutory cap in the powers themselves, but the ten Labour metro mayors - including Greater Manchester and Liverpool City Region - have jointly pledged to keep any levy at or below 5% of the cost of accommodation. Accommodation providers, not guests, will be responsible for collecting and paying it to the local strategic authority, and a formal bill will set the legal framework.

Who feels it first

Anyone running on razor-thin margins. The levy is small for a well-priced property - 5% of a £120 nightly rate is £6 - but it doesn't arrive in isolation. It stacks on top of the abolition of the furnished holiday lettings tax regime, tighter planning and licensing in hotspots, and rising cleaning and minimum wage costs. Operators who priced their listing off a spreadsheet in 2023 and never revisited it are now running a business with no buffer. The levy is simply the thing that tips them.

And that, frankly, is why it doesn't phase us - it excites us. Because the operators who fold under this will be the amateurs: the ones cutting corners on cleaning, photographing rooms on a phone, ignoring dynamic pricing and replying to guests when they remember. We don't run that way, so we're not the ones getting squeezed. Any other unethical or half-hearted operator running on margin-panic will exit the market, and quality listings will inherit their demand.

Registration is coming for the platforms too

The levy is only half the picture. Alongside it, the Government is pressing ahead with plans for a short-term lets registration scheme, under which platforms like Airbnb and Booking.com will be barred from listing unregistered properties. Enforcement at platform level changes everything: it's no longer a council chasing individual hosts, it's the listing simply not going live. Legitimate, registered, professionally run properties have nothing to fear from that. Unregistered, untraceable weekend-listing operations do.

Why a professional service absorbs the levy

• Dynamic pricing - we reprice daily against real demand, so new costs are absorbed into rates the market is already paying
• Quality furnishings and professional photography - the listings that keep commanding premium rates as costs rise
• Automated guest communication and proper cleaning teams - the margins that survive are built on process, not luck

Cities like Berlin, Amsterdam and Barcelona have already run this experiment: visitor levies and platform rules shook out the casual end of the market, and occupancy didn't collapse - quality consolidated. The same will happen here. Fewer listings, better-run listings, and a bigger share of demand flowing to the operators left standing.

What it means for your property

If you're self-managing, ask yourself honestly: can you keep five-star standards, daily pricing and full compliance while a new levy, a registration scheme and whatever comes next land on your desk? If the answer is no, that isn't a failure - it's the signal that the market has moved on from the hobby era.

Under Ruso Property's fully managed service, the levy, the registration, the pricing and the guest experience are our job, not yours. Under guaranteed rent, we take the whole risk: a fixed monthly payment whether the property is booked or empty. Either way, you end up on the professional side of the line the tourist tax is drawing through the market.

Want to see the numbers for your property? Get a free income estimate and we'll show you what a professionally run short let earns - levy and all.