Researchers from University of Galway have designed a visitor levy scheme for Ireland that could generate millions of euro in tax revenue for central government and local authorities.

The policy brief ‘Designing a Visitor Accommodation Levy (VAL) for Ireland’ shows that with a well-designed scheme, revenues in excess of €200 million a year could accrue to the local government sector.

In EU countries and in parts of the UK, “visitor levies” or “tourist taxes” charged by local councils on overnight paid accommodation are common. Ireland does not impose these levies. Both the 2024 Dublin City Taskforce and the 2026 Local Democracy Taskforce have recommended a levy on overnight stays.

The research shows that a visitor levy would meet two objectives set out in the Programme for Government 2025 - Securing Ireland’s Future, namely, to broaden the tax base and to strengthen local democracy.

The key design features of a Visitor Accommodation Levy (VAL) are the tax base, liability, coverage, exemptions, tax rate, administration, collection and use of funds. Actual revenues will depend on the base/coverage, the tax rate, exemptions and caps, and could raise an estimated €220 million per annum for the local authorities, according to the findings of the research.

The research was undertaken by Dr Gerard Turley and Stephen McNena from the J.E. Cairnes School of Business & Economics at University of Galway, who also manage the www.localauthorityfinances.com website.

The study used data from Fáilte Ireland's National Quality Assurance Framework registers, which contains 225,098 bedspaces as of January 2026. This figure excludes unregistered B&Bs, short term lets and on-campus student accommodation.

Dr Gerard Turley, Lecturer in Economics at University of Galway, said: “Based on a fixed tax rate per person per night, we estimate that each €1 of a Visitor Accommodation Levy would generate €44 million per annum for the local authorities. A €5 tax rate per person per night would generate almost €220 million for the local government sector. Taking three examples from the 31 local authorities, this translates into €5.7 million for Waterford City and County Councils, €8.2 million for Galway County Council, and €46 million for Dublin City Council.

“For hotels only, our estimates show that a €1 tax rate per person per night would generate the same revenue, circa €33 million, as a 1% room tax rate per night based on 2025/26 data for the number of hotel rooms, occupancy rates and the Average Daily Rate (ADR).”

Stephen McNena, Lecturer in Economics at University of Galway, said: “Our research shows that revenues will depend on the categories of accommodation providers covered in the legislation, as well as the tax rates levied and any exemptions or caps. The choice of tax rate is a percentage rate or a fixed rate, to be applied per person or per room. As both approaches have advantages, we recommend that local authorities have the discretion to choose percentage rate or fixed rate at a level that is appropriate to the local circumstances, the strength of the local tourist sector and the uniqueness of the destination.”

The authors advise that pre- and post-legislative consultation with key stakeholders is essential, including accommodation providers, tourism industry, residents, visitors, business organisations and public representatives.

Additional policy recommendations include:

• Further research is required, including a price sensitivity analysis and an impact assessment study.
• Learning from other visitor levy/tourist tax experiences internationally and recent UK developments.
• The naming of the levy/tax and the ringfencing of revenues are crucial, to ensure transparency and secure acceptance.
• The importance of tax administration, including collection, compliance and enforcement.
• Local discretion is strongly recommended, in terms of an opt-in to a national visitor levy scheme, local rate-setting powers, and determining exemptions and caps.

The full policy brief can be read here.

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