A long-mooted tax on hotel guests in Dublin is to be developed by a county-wide local authority team expected to be in place by September. The regional group will lay the groundwork for legislation while also lobbying for broad political support and promoting public awareness.
The prospect of a visitor levy has proved contentious in the past. The argument has been dismissed by hotels as “groundless” even though supporters have pointed to its success abroad.
In recent months the finance committees of Dublin’s four local authorities have planned a united front for legislation that would clear the way for a new income stream.
Dublin City Council, Fingal and South Dublin county councils have all signed up to the proposed working group, while Dún Laoghaire Rathdown is close to doing so.
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“The overall message is that local authorities aren’t particularly well funded...we have to look at other ideas,” said Cllr Séamus McGrattan, chairman of Dublin City Council’s finance strategic policy committee.
Currently local property tax, commercial rates and rents are the primary income sources of local authorities. Any tourist accommodation charge – known variously as a visitor transient levy or a hotel accommodation tax – has yet to be agreed, but would likely comprise a flat or percentage rate.
“Other European countries started doing it so it sort of looked like a viable option,” Mr McGrattan said of initial consideration of the plan two years ago. “When we looked into it we saw the success, particularly in some of the American states where it’s done, and I think Edinburgh now is the latest city to bring it in.”
The Sinn Féin councillor has noticed a shift in the political mood at national level, a change in “tone” that suggests a greater likelihood of getting it through Leinster House. “Before it was a sort of blank no,” he said.
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The Irish Hotels Federation said there were no grounds for introducing an additional tourist tax. Its members were already making “an enormous contribution” to the exchequer and local authority services.
It said that in Dublin hotels pay approximately €1,000 per bedroom in commercial rates, amounting to over €25 million a year. “Given the massive cost increases over recent years the last thing we should be doing is to increases taxes further and making Ireland less attractive,” it said.
“A bedroom tax would mean less money for tourists to spend in downstream tourism businesses, and less money when tourists go on to visit and stay in other parts of the country.”
Visitors to Edinburgh in Scotland will face a 5 per cent overnight levy on accommodation costs from July 2026, a move expected to raise £100 million (€117m) by 2030 to help fund public services, cultural programmes and city infrastructure.
“If we don’t bring in some sort of tax we become almost like an outlier in Europe,” said JP Durkan, chairman of Dún Laoghaire-Rathdown County Council’s finance committee who has raised the issue with Minister for Finance Paschal Donohoe. The council has agreed to participate but intends to set its own levy rate.
Cllr Dan Carson, who chairs the council’s enterprise committee, said the local authority area has only seven hotels and would be less affected by the move, but that giving councils more autonomy to raise funds was to be welcomed. “If you have four Dublin local authorities asking for it I’m not sure why the Government would stop it,” he said.
