The local accommodation sector in Portugal has shown significant growth and important regulatory changes in recent months. This article presents a summary of the main news and new rules in the sector.
Local accommodation licenses become transferable again
The portuguese Government has approved a draft diploma that allows the transfer of local accommodation licenses, which were previously non-transferable under the “Mais Habitação” program. These licenses will now be able to change ownership along with the property.
The measures, approved on August 8th by the Council of Ministers, also eliminate the expiration of this licenses, another innovation from the previous government’s “Mais Habitação” package, which was highly contested by the sector. Additionally, the measures also grant more powers to municipal councils.
The Minister of the Presidency, António Leitão Amaro, emphasized that the decision on new local accommodation licenses will be decentralized, allowing municipalities to make decisions tailored to local needs.
End of the Extraordinary Contribution on Local Accommodation
Two months after approval by the Assembly of the Republic, the portuguese Government eliminated the extraordinary contribution of 15% on local accommodation properties (CEAL), one of the most contested measures of the “Mais Habitação” package. This measure will have retroactive effects to December 31, 2023. Additionally, the decree eliminates the increase in IMI, that is, the age coefficient applied to local accommodation properties that prevents the age of buildings from being reflected in the reduction of IMI, now allowing it to be reflected in the tax reduction. The new legislation also creates new IRS rules related to capital gains, facilitating fiscal management for local accommodation property owners.
Waiver of Condominium Approval for Local Accommodation
The Government approved a decree-law that exempts local accommodation owners from the need for prior condominium approval to start their activity in residential buildings. This measure eliminates the requirement for unanimous condominium approval for changing the use of the property. This change is seen as an important relaxation of the rules for the sector.
Condominiums Lose Power to Shut Down Local Accommodations
The Government is preparing a bill that removes the power of condominiums to close local accommodation establishments. Now, it will be necessary to prove that the establishment causes inconvenience before closing or preventing its opening. The final decision on closure will be made by the municipalities, no longer by the condominiums. Additionally, the bill proposes the creation of an mediator for Local Accommodation, who will help resolve conflicts between residents, AL owners, and condominium members.
APEGAC Advocates Mandatory Mediator for Local Accommodation in Municipalities with Higher Activity
The Portuguese Association of Condominium Management and Administration Companies (APEGAC) supports the creation of a mediator for local accommodation but argues that it should be mandatory in municipalities with higher activity.
Eduardo Miranda, president of the Local Accommodation Association in Portugal, welcomes the creation of an madiator.
Application of Tourist Tax Revenues
Currently, 24 out of 278 municipalities apply a tourist tax, and several others will start applying it soon, namely Setúbal and Caminha (September) and Loulé (November).
The revenues from the tourist tax, charged per overnight stay in establishments or local accommodation, are applied in various areas such as cultural and heritage offerings, urban cleaning, and security.
In Lisbon, the revenue is mainly used for urban cleaning, raising about 203.2 million euros since 2016. Setúbal expects to raise around 400,000 euros annually starting in September.
In the Algarve, cities like Olhão also use the tax to finance local projects. The Government’s goal is to balance the interests of property owners, investors, condominium members, and those seeking housing.
The local accommodation sector in Portugal is expanding, with regulatory changes that promise to facilitate the management and transfer of licenses. These updates reflect a dynamic and constantly evolving market, with positive impacts for both local operators and tourists.
