Tourist tax could raise more than €200m for local authorities, research shows

A nightly tourist tax of €5 per person could raise more than €200 million for local authorities, according to new research from the University of Galway. Such a levy would benefit the 31 local authorities to varying degrees, with Dublin City Council projected to be the largest beneficiary with a tax take of €46 million.A €5 nightly tax would translate into €5.7 million for Waterford City and County Council, and €8.2 million for Galway County Council, the policy document suggests. Visitor levies – or tourist taxes – charged by local councils on overnight paid accommodation are common in EU countries and in parts of the UK.READ MORENo such scheme has been rolled out in the Republic but the 2024 Dublin City Taskforce and the 2026 Local Democracy Taskforce have recommended a levy on overnight stays.The hospitality sector has opposed taxing tourists, arguing it could make Ireland a less attractive place to visit.The research suggests a visitor levy would meet two objectives set out in the Programme for Government – to broaden the tax base and strengthen local democracy.“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 research.[ Tourist tax of up to €5 per night considered for Dublin cityOpens in new window ]It was carried out by Gerard Turley and Stephen McNena from the JE Cairnes School of Business & Economics at University of Galway. Data from Fáilte Ireland registers was used, which contained 225,098 bed spaces as of January. That number excludes unregistered B&Bs, short-term lets and on-campus student accommodation.“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,” Turley said. “A €5 tax rate per person per night would generate almost €220 million for the local government sector. “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 per cent room-tax rate per night based on 2025/26 data for the number of hotel rooms, occupancy rates and the average daily rate,” he added. McNena said the research shows 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”.He said 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 a 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.”