A new law in Wales will mean anyone renting a short let property will be hit with a £1.25 nightly tax.

The Visitor Accommodation (Register and Levy) Etc. (Wales) Bill proposes that people staying overnight in Wales must pay £1.25 to support local tourism activity and infrastructure.

A statement from the Welsh government claims the tax would provide local communities the opportunity to generate additional revenues. If all Welsh local authorities choose to introduce a visitor levy, it is estimated it could generate up to £33m a year.

The levy would be set at 75p per person per night for people staying in hostels and on campsite pitches, and £1.25 per person per night for those staying in all other accommodation types.

The legislation also includes a requirement to establish and maintain a register of visitor accommodation in Wales, which would – for the first time – provide a register of the broad range of visitor accommodation available across the country.

Local authorities will decide if they want to introduce a levy in their area. It is estimated the earliest this could happen is 2027 after a local authority has consulted their community.

The Labour-led Welsh Government claims that such taxes exist in Manchester, Greece, Germany, Netherlands, Spain, Portugal and California, with funds raised are used to support a healthy visitor economy by protecting and investing in the infrastructure and services.

Finance Secretary Mark Drakeford says: “This Bill is rooted in the principle of fairness. We know tourism makes an important contribution to the Welsh economy and to Welsh life. We want to ensure its long-term sustainability.

“That’s why we believe it is fair visitors contribute towards local facilities, helping to fund infrastructure and services integral to their experience. Visitor levies are common around the world, benefiting local communities, tourists and businesses – and we want the same for Wales.

“Money raised through a levy would be retained by local authorities and re-invested back into their local areas to support local, sustainable tourism. It’s a small contribution that could make a big difference.”

A statutory registration scheme for all accommodation providers is expected to start operating in 2026 to support the collection and administration of a visitor levy. It will include details about who is operating in the sector, where they are operating, and how they are operating, and help establish a better understanding of the sector and support future policy decisions at a local and national level.