Definitions are useful, but the words make more sense once you see how they connect. This section puts the terms to work: the order you'll meet them in your first year as a host, the ones people mix up, and the numbers behind them.
Your first year as a short-let owner: the terms in the order you'll meet them
Most owners don't meet these words alphabetically. They meet them one at a time, roughly in this order.
Before you start
The first question is whether the home is your main home. If it is, you're looking at home letting or home sharing. If it isn't, it's secondary letting, and because Edinburgh is a control area, you'll need planning permission or a certificate of lawfulness. If you're buying, ADS and LBTT come up here too, along with the title burdens and deed of conditions for the building.
Getting the licence
Next comes the paperwork for the short-term let licence: the gas safety record, EICR, PAT, a legionella risk assessment, the EPC and a floor plan showing the maximum occupancy. You put up a site notice for 21 days. Once the licence is granted, you get a licence number and send the neighbour notification letter within 28 days.
Going live
Now the money words arrive. You set a minimum stay, choose dynamic pricing, and connect the platforms through a channel manager. You start to watch ADR, occupancy and RevPAR. Each stay in the City of Edinburgh adds the Visitor Levy, filed every quarter.
By the end of the year
The 140/70 rule decides whether the home pays council tax or business rates. If it's a second home on council tax, the second-home premium applies. At tax time, you'll find that the FHL rules have gone, and Making Tax Digital may apply depending on your income. The neighbour notification letter goes out again.
If you'd like this in a printable form, our free guide for every Edinburgh host goes through each stage. For the licence part, start at the licensing hub.
Licence terms that get mixed up: home letting, secondary letting and the rest
Six of the terms above describe different routes to letting legally in Edinburgh. They sound alike and they're easy to confuse, so here they are side by side.
| Term | Whose home? | Planning needed? | How long |
|---|---|---|---|
| Home sharing | Your main home, while you live there | Usually no | Licence, renewed |
| Home letting | Your main home, while you're away | Usually no | Licence, renewed |
| Secondary letting | A home that isn't your main home | Yes, in Edinburgh | Licence, renewed |
| Temporary exemption | Depends on the type | Planning rules still apply | Up to six weeks in a year |
| Temporary licence | Depends on the type | Planning rules still apply | Up to six weeks |
| Certificate of lawfulness | A home already used as a short let | It replaces the need for permission | Confirms a use, not a licence |
The two pairs people mix up most
Home letting and secondary letting. The difference is whether it's your main home, not how often you let it. A flat you never live in is secondary letting even if it's only let for a month a year. Our pages on the home letting licence and secondary letting and planning cover each one in full.
Temporary exemption and temporary licence. Both cover short periods, which suits the Fringe. An exemption lets you host for a short time without a full licence; a temporary licence is a short licence the council decides on. Neither is a way round planning for a home you don't live in. See letting for the Fringe.
And one that isn't a licence at all
A certificate of lawfulness is a planning document. It can confirm that a short-let use is lawful, but you still need a licence to host.
Short-let money terms: ADR, occupancy, RevPAR and net booking revenue
Four terms do most of the work when you talk about what a home earns. Here's how they fit together, with simple illustrative numbers.
ADR and occupancy
Say a home is booked for 20 nights in a 30-night month, and those 20 nights bring in £3,000 in accommodation. The ADR is £3,000 divided by 20, so £150. The occupancy is 20 out of 30, so about 67%.
RevPAR
RevPAR is ADR multiplied by occupancy: £150 times 67% is about £100 per available night. It's the fairest single number for comparing months, because it rewards neither a high price with empty nights nor a full calendar at a low price.
Why the three pull against each other
Raise the price and occupancy usually falls. Drop it and the calendar fills, but ADR falls. Dynamic pricing tries to find the point where RevPAR is highest on each date. During the Fringe that point is high; on a wet Tuesday in February it's lower, and a minimum stay that's too long can leave gaps.
Net booking revenue
None of the above is what you take home. Net booking revenue starts with what guests paid, then takes off platform fees, cleaning and the Visitor Levy. That's the figure our management fee is worked out on. Full management is from 15% + VAT of net booking revenue for one to four homes, which is 18% once VAT is added.
| Term | Answers the question |
|---|---|
| ADR | What does a booked night earn? |
| Occupancy | How full is the calendar? |
| RevPAR | What does every available night earn, on average? |
| Net booking revenue | What's left after platforms, cleaning and the levy? |
The figures above are illustrations only. For an estimate for your own home, try the earnings calculator, and see our pricing page for every fee.
Tax and rates terms: how the 140/70 rule, the premium and MTD connect
Four terms in the glossary decide what a short let pays the council and HMRC. They interact, so it helps to see them together.
The 140/70 rule decides council tax or business rates
If the home is available to let for 140 nights in the year and actually let for 70, it goes on business rates. If not, it pays council tax. A home that's let a lot will usually be on business rates; a home let only for a few weeks around the Fringe will usually stay on council tax.
The second-home premium only bites on council tax
If a home that isn't anyone's main home stays on council tax, Edinburgh's second-home premium applies. It's 100% now and rises to 300% from 1 January 2027. That makes the 140/70 rule matter more than it used to.
FHL has gone
The furnished holiday let rules gave short lets their own tax treatment until April 2025. Now short-let income is taxed much like other property income. Owners who set things up under the old rules should check them again.
MTD changes how you report
Making Tax Digital means digital records and quarterly updates to HMRC. It applies where self-employment and property income together are over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028. Tidy booking records, including the levy shown separately, make it far easier.
Where Rent a Room fits
Rent a Room lets you earn up to £7,500 a year tax-free from furnished rooms in your own home. It suits home sharing, not a whole home let while you're away.
Our pages on council tax or business rates and the council tax premium in 2027 go further, and our short-let tax guide covers the changes since April 2025. For anything specific, talk to your accountant.
Tenement and building terms: what they mean for a short let
Most Edinburgh short lets are flats, and most flats are in buildings with shared rules. Five terms in the glossary describe how those rules work.
Title burdens and the deed of conditions
A title burden is a rule in the title deeds that binds every owner. Some say the flat must be used as a private dwelling only. The deed of conditions sets shared rules and cost splits for the whole building. Read both before you start a short let, because neither is overridden by a licence or planning permission.
The Tenement Management Scheme
Where the deeds are silent, the Tenement Management Scheme fills the gaps. It sets out how owners decide on repairs and split the bills. If your building has no factor, it's usually how decisions get made.
Common parts and the factor
The common parts are the stair, the roof, the back green and anything else shared. A factor manages and bills shared maintenance where the building has one. For a short let, the common parts are where guests meet neighbours. Keeping the stair clear and the bins sorted matters more than any listing photo.
How it plays out on a real stair
- A guest leaves suitcases on the landing: a common parts problem
- The roof needs work and owners vote on it: Tenement Management Scheme or deed of conditions
- The factor sends a bill: shared maintenance, split as the deeds say
- A neighbour asks who to call: the neighbour notification letter
Our guide to short-letting a tenement flat covers stairs, key safes and common repairs in detail. Neighbours who want to know how we run our homes can read our page for neighbours.
For the terms in context, see home letting vs secondary letting and mortgage and insurance for short lets on our blog.
Book a 15-minute call with one of the co-founders, or get a free plan for your home: what it could earn, the licence route and every cost.
