The Portuguese Hotel Association (‘AHP’) estimates that a third of the accommodation offered is not licenced. In order to correct this situation and make sure establishments that provide accommodation against payment are licenced (Rental Licence) according to the Local Lodging Law which was introduced in Novmeber 2014.
ASAE – The national Economic and Food Safety Authorities are conducting inspections on web-sites and portals to identify the properties that are not licensed and apply the heavy penalties due for non-compliance to both owners and companies that range from 3.500 euros and 37.500 euros for each property.
Records show that there has been a significant increase in ‘AL’ registrations in Lisbon and Porto, as opposed to the Algarve region where most of the establishments are located, that are used for this purpose (54%)
Why should you licence your property?
For your peace of mind and to avoid heavy fines.
To prevent tax evasion and encourage compliance, tax incentives have been introduced and the bureaucratic process simplified: you will not be required to pay social security in Portugal if you already do so in your home country; 85% of your rental income is tax free and you will only pay 25% on the remaining 15%. Therefore, the overall rate on the total rental income is 3.75% although no expenses can be offset.
Contact your fiscal representative or property manager for assistance.