{"id":957523,"date":"2026-05-13T17:44:29","date_gmt":"2026-05-13T17:44:29","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/957523\/"},"modified":"2026-05-13T17:44:29","modified_gmt":"2026-05-13T17:44:29","slug":"tourist-tax-and-leasehold-reform-what-the-kings-speech-means-for-london","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/957523\/","title":{"rendered":"Tourist tax and leasehold reform: What the King’s Speech means for London"},"content":{"rendered":"

\"WEST<\/p>\n

Long-awaited reforms to housing, education, justice and health were at the centre of the King<\/a>\u2019s Speech as the under-fire Prime Minister attempts to show the country he can bring about the changes his party promised. <\/p>\n

But the King\u2019s address was overshadowed by reports Health Secretary Wes Streeting is preparing to resign and launch a Labour leadership bid following his short meeting with the PM in No10 on Wednesday morning.<\/p>\n

The speech included bills to abolish NHS England, introduce a \u201ctourist tax<\/a>\u201d, limit trials by jury, overhaul special educational needs teaching, bring in digital ID and reform the leasehold system in England and Wales. <\/p>\n

Here is what it means for Londoners: <\/p>\n

The Overnight Visitor Levy Bill will \u201cdeliver on the manifesto commitment to transfer power out of Westminster by devolving new revenue raising powers\u201d, the Government said. <\/p>\n

It will mean tourists face a charge when staying in hotels and short-term lets in London<\/a> and other tourist hotspots, similar to the levy charged by many other European cities. <\/p>\n

Mayors and \u201cpotentially other local leaders\u201d will be able to take the cash raised and \u201creinvest it back into their local economies\u201d.<\/p>\n

Details of the cost, and where the money will be spent, have not been released. BusinessLDN has called for the tax to be a flat rate of around \u00a32-3 per night. <\/p>\n

The Government said it will shortly publish a response to a consultation that sets out the views of businesses and councils and \u201cprovide further detail on the design and implementation of the levy\u201d.<\/p>\n

<\/p>\n

Tourists walking across Westminster Bridge<\/p>\n

Getty<\/p>\n

Paul Swaddle, the new Tory leader of Westminster City Council<\/a>, said: “While comparisons are often drawn with other capital cities, the reality about an overnight visitor levy is that in Europe, VAT is significantly lower and the total tax burden is lower. <\/p>\n

\u201cOur hotels across the West End and elsewhere in Westminster need to be competitive to keep us a global visitor attraction. “However if the levy is to be raised, it must be spent locally for services that benefit visitors, such as keeping the streets clean and safe. <\/p>\n

\u201cThe cost of supporting the visitor and commuter economy in Westminster is an estimated \u00a3115m a year and that needs to be recognised. It’s important we now see the fine print of what is being proposed.”<\/p>\n

Leasehold Reform and Housing<\/p>\n

Leasehold reform has long been promised by the Government after homeowners have faced skyrocketing service charges and ground rents. <\/p>\n

More than a third of London\u2019s housing stock, over 1.4 million homes, are leasehold flats. <\/p>\n

The Government said reforms will mark \u201cthe beginning of the end for the feudal leasehold system that has tainted the dream of home ownership for so many\u201d. <\/p>\n

Legislation to \u201cincrease long-term investment in social housing and reform the leasehold system, including the capping of ground rents\u201d at \u00a3250-a-year, will be brought forward. New leasehold flats will be banned and laws that mean leaseholders can request improvements, such as a gigabit capable broadband connection, introduced. <\/p>\n

A bill aimed at supporting remediation for people living in homes with unsafe cladding will also be put in place. <\/p>\n

King Charles III said: \u201cMy Government will seek to reinforce the long-term energy, defence and economic security of the United Kingdom as an essential component of strength on the world stage. <\/p>\n

\u201cThis will include housing, which can be a source of insecurity for many people. My Ministers will bring forward legislation to increase long-term investment in social housing [Social Housing Renewal Bill] and to reform the leasehold system, including the capping of ground rents [Commonhold and Leasehold Reform Bill].\u201d<\/p>\n

\"New<\/p>\n

New leasehold flats will be banned<\/p>\n

PA Archive<\/p>\n

Leaseholder campaigners have called for an end to the system that sees landlords have control over the management, shared facilities and related costs of their homes rather than residents who have a stake in their upkeep.<\/p>\n

Harry Scoffin, the founder of campaign group Free Leaseholders, said the reforms were too \u201csmall\u201d and accused the Government of \u201cpropping up the service charge racket\u201d. <\/p>\n

He said: \u201cThis is more talk big, act small politics from the Starmer government. <\/p>\n

\u201cIt is an insult to the millions of leaseholders being looted in their homes that a Labour government has walked back its manifesto promise to \u2018end\u2019 the feudal leasehold system, instead serving up sham \u2018reform\u2019 designed to keep big money interests happy. <\/p>\n

\u201cAstonishingly, the only new measure appears to be little more than a right for leaseholders to petition at the feet of their freeholder masters for permission to get an internet connection. It is the modern-day equivalent of telling the peasants to eat cake. <\/p>\n

\u201cOur supporters are trapped in their homes, unable to sell or remortgage and suffering negative equity, while Hamptons has found that 37% of leasehold flats now have service charges in excess of 1% of the property value, which lenders increasingly refuse to back.\u201d<\/p>\n

Caroline Wild, Counsel in the Real Estate Disputes team at Forsters, said: \u201cGiven the growing pressure on the government to deliver on its manifesto commitment to leasehold reform, it was unsurprising to see the issue return to the public agenda in the King\u2019s Speech. <\/p>\n

\u201cWith leasehold reform now politically inevitable, any forthcoming Bill is likely to represent one of the most significant overhauls of property ownership for generations. However, while the political intent is clear, the government still faces a considerable challenge in balancing the competing interests at play. <\/p>\n

\u201cIf the balance is not struck, there is a real risk that the property market could be left in a prolonged state of uncertainty, with leaseholders potentially worse off than they were before.\u201d<\/p>\n

Other measures in the King\u2019s Speech include:<\/p>\n