Alojamento Local – A Quick Guide to Tourist Rentals in Portugal

by | Oct 7, 2023 | Alojamento Local, Featured, Fiscal, Guide, Mais Habitação

All rights reserved. © Roger Warwick. Version 2.0

Document based on Decree-Law Nº 128/2014 from 29th August, updated by Decree-Law Nº 63/2015 from 23rd April, Decree-Law Nº 62/2018 from 22nd August, Ordinance n.º 262/2020 from 6th of November, and Lei n.º 56/2023 from 6th of October.

NOTE: This document applies to the current situation for AL properties in mainland Portugal, taking into account the new housing law called “Mais Habitação”, and excluding Madeira and the Açores, which have their own legislation.

BASIC STEPS TO TAKE

  1. Determine if AL registration is possible

The new housing law (Lei n.º 56/2023 de 6 de outubro) includes a measure to suspend all new AL registrations in the categories of “Apartamento” and “Estabelecimentos de Hospedagem” outside the low-density interior areas defined in the annex of ordinance Portaria n.º 208/2017, de 13 de julho, which means, by definition, that any AL implemented as one of the other two categories – “Quartos” or Rooms and “Moradia” or house, such as a villa, semi-detached or detached single-family house, etc – is automatically possible in the entire country.

So, the first step is to check if the property is located in one of the areas above. If so, it can be registered as an Alojamento Local property in any of the 4 categories.

If not, then you should next decide what category the AL is going to be. If the property is located in a condominium building with so-called horizontal property, the only possibility outside of the interior areas mentioned above, is to do short-term rentals in the Rooms category.

If you are not sure what kind of building yours is, check the section called “DESCRIÇÃO DO PRÉDIO” on the caderneta predial tax document. If it mentions Propriedade Total in a line something like this: “Tipo de Prédio: Prédio em Prop. Total sem Andares nem Div. Susc. de Utiliz. Independente”, then you can do short-term rentals in the entire building in the “Moradia” category, or rent out individual rooms in the “Quartos” category.

Alternatively, if that line on the caderneta says something like this: “Tipo de Prédio: Prédio em Regime de Prop. Horiz.”, it is indicating that the building is a Horizontal Property building and AL is not possible outside the interior areas mentioned above, except in the Rooms category. In summary:

  • Low-density, interior areas: All types of AL are permitted
  • Outside these areas: Only Rooms/Quartos and Houses/Moradias are allowed

Even if there are no restrictions according to area, in the case of an AL in a horizontal property building with a condominium, it is now necessary to obtain permission from the condominium to start an AL, unless the original constitutional document of the condominium expressly authorises the AL activity, or a previous condominium meeting has allowed AL in that particular unit, which is VERY unlikely. Otherwise, the condominium has to approve the activity by unanimous vote.

Now that you have determined if it’s possible to register your property as an AL, you can follow the next steps.

2. Start business activity (iniciar actividade)

Note: This step assumes you have carried out a basic Business Plan and have decided to initiate the tourist rental activity as an individual, rather than a company, which remains outside the scope of this document. We highly recommend that this step is taken in conjunction with a specialized accountant.

You must have a NIF (tax number, or “número de contribuinte”) and then register as an independent business owner (Empresário em Nome Individual) with the activity code (CAE) 55201, which corresponds to the activity of Alojamento Local. If you are planning to hire a company to manage the check-ins/outs, cleaning, washing and other aspects of the business, it is almost always beneficial to register for VAT. Otherwise, the registration can be done such that you are exempt from paying VAT during at least the first year, but we recommend simulating your costs first, to see if the possible VAT deductions on costs means it is beneficial for you to register in the VAT regime. If you have access to your personal area of the Finanças website, you can initiate the business activity online, and you should make sure to activate the option to acquire intracommunity transactions for services.

3. Register the property

This may be done online if you possess a “Cartão de Cidadão” or the Chave Móvel Digital (which for non-Portuguese nationals must be requested personally at the Loja do Cidadão). Otherwise, the property registration must be done in person, at the local city hall (Câmara). The following is necessary:

  • Take a look at all details in the form below. The exact fields or layout may change, but this is basically the information that you will be asked for. https://bde.portaldaempresa.pt/balcaodoempreendedor/Resources/pdfforms/form_00000000-0000-0000-1111-000000000006.pdf
  • A copy of your passport or other identity document
  • A copy of the property tax document indicating ownership (caderneta predial)
  • Copy of rental contract or other legal document authorizing the activity of Alojamento Local, if not the owner of the property
  • Copy of the business activity registration from Step 1
  • Authorization by the condominium (the act of the meeting), in the case of an AL implemented in a horizontal property or condominium building.
  • If the property was built after 1951, you may be asked to present the “Licença de Utilização”. In Lisbon, all Alojamento Local properties must have a residential use licence. In other municipalities (e.g. Porto), a Services licence may be permitted. The relevant municipality should be consulted.
  • If planning to rent for less than 120 days a year in your own residence, this must be indicated.

The local city hall has 10 working days (20, in the case of hostels) to decide if the documentation is correct and everything is in order to grant the Alojamento Local registration number. You should receive a process number immediately, by email, and then after this period of 10 working days a document indicating the AL number, which should be published in all adverts and marketing material, including listings on Airbnb, Booking, Tripadvisor, etc.

If, after 10 working days (20 in the case of Hostels), no information has been received, you can also check the online database of Alojamento Local properties, run by Turismo de Portugal and available here: https://rnt.turismodeportugal.pt/  The local municipality has 30 days after the date of registration to inspect the property and make sure all requirements are met. Not all municipalities do this, but most do and may even charge for the inspection – prices can usually be seen on the relevant Câmara’s website. See the Ficha Técnica da ASAE in the useful links section for ideas about what they might be checking for.

Note that the new housing law means that the AL registration is absolutely non-transferable, even when the title holder is a company. In fact, any change at all in the shareholders of the company means that the registration is invalid. The only exception to this rule is if the property has been inherited.

Another change with the recent law is that all AL registrations, including already existing ones, are temporary, and will have to be renewed every five years starting in 2030, and taking into account the date of registration. The local municipality will decide to renew or not, according to local housing needs.

Furthermore, AL properties in a horizontal property condominium building run the risk of the registration being cancelled by the condominium if the decision is taken by a two-thirds majority of the permilagem, or quota share, at a General Assembly of the condominium.

CATEGORY, REQUIREMENTS, CAPACITY

4. Category of the Establishment

When completing the form in Step 2, above, it is necessary to indicate which category the property is being registered in. These are: Moradia (single-family properties), Apartamento (apartments, rented as a whole unit), Estabelecimento de Hospedagem (properties with several rooms, each rented individually, e.g. guesthouses) and Quartos (maximum of 3 rooms in a property, rented individually, and only when the property is registered as the permanent residence of the business owner). There is no restriction stipulated in the law for registering an AL in ANY category when it is the permanent residence of the owner.

Within the category of Estabelecimento de Hospedagem, there is a sub-category of Hostel (mostly made up of dormitory type rooms).The revenue from Apartamentos and Moradias are taxed at your progressive IRS rate, on 35% of the total earnings (50% if located in a Contention Area). For Estabelecimentos de Hospedagem and Quartos, it is 15%. So, if your IRS tax rate is 21% and you have an apartment that earns 10.000€ gross per year, you will pay IRS tax of 21% x 35% x 10000 = 735€
Owners of Apartamentos and Moradias are exempt from social security payments, when the only revenue is from this business (see section 15).

5. Requirements for Alojamento Local

Note: we highly recommend consulting the relevant legislation for an exhaustive list of requirements. We are not responsible for any consequences caused by not following local and national laws.

  • Be in reasonable condition, including all equipment
  • Be connected to the public water supply, or sufficiently controlled private supply, and be connected to a suitable sewerage system. Hot and cold water should be available.
  • Have a window or opening to the exterior, providing sufficient ventilation, and have a system that allows all natural light to be blocked (shutters, etc)
  • Possess adequate equipment, furniture and utensils, and all doors must provide a system for the security and privacy of the guests.
  • Good conditions of hygiene and cleanliness
  • Security: First aid kit, fire extinguisher, fire blanket, 112 emergency number & no-smoking signs
  • Establishments with capacity for more than 10 guests should consult the relevant legislation to comply with fire safety rules, meaning the possible installation of smoke detectors, sprinklers, fire extinguishers, relevant signage, and a central fire alarm system. We recommend consulting with a specialist fire safety company in this case.
  • Official complaints book (Livro de Reclamações), both electronic and hard copy
  • Alojamento Local sign, according to characteristics defined in the Decree-Law or the 2020 Ordinance (smaller size) and installed next to the main door of the establishment. Can be ordered from suppliers, online or otherwise. Not required (in mainland Portugal) for AL’s registered in the “Moradia” category.
  • Information booklet, available in 4 different languages which must include Portuguese and English. Includes information about the establishment and its rules & regulations, rules for the collection of waste, instructions for any on-site equipment, rules regarding noise in the establishment and vicinity, emergency telephone number of the business owner, and rules of the condominium, if applicable.
  • A visible sign in the property indicating general noise rules as per the law Lei n.º 56/2023, de 6 de outubro

The business must be covered by a multirisk insurance policy. Details of such a policy are defined in ordinance Portaria n.º 248/2021, de 29 de junho. However, we highly recommend that you join the national Alojamento Local association (ALEP). Apart from defending all AL owners’ interests, they include the necessary insurance for an AL property in their yearly quota which, for individuals, is just 88€/year. More info: http://alep.pt

6. Maximum capacity

Alojamento Local establishments are limited to a maximum capacity of 9 rooms and 30 guests, except in the case of Hostels, which have unlimited capacity, and Quartos, which have a capacity of 3 rooms.

Furthermore, the capacity is limited to 2 guests per room, with the possibility of a further 2 guests in the living room in the case of Apartamentos and Moradias.

It is only possible to run more than 9 Alojamento Local establishments in one building if the number does not exceed 75% of the total number of independent units.

OPERATIONAL OBLIGATIONS

7. Reporting to SEF

It is obligatory to report to SEF the stays of all foreign citizens up until 3 days after the check-out. It is possible to do this online at https://siba.sef.pt/ (registration required first)

8. City Tax

In some municipalities (e.g. Lisbon, Porto, Cascais, and others), it is necessary to charge the municipal tourist tax (taxa turística), on top of the price of the stay, to be paid to the local council, some of which have online platforms for doing this.

9. Arbitration Centres

It is obligatory to have on public display a list of the local arbitration centres (Centros de Abitragem) in case of any litigious situation.

10. INE Statistical Reports

You may be required to send monthly statistics regarding the number of guests at your establishment if so required by the National Statistics Institute (INE), but it is not obligatory if you are not contacted.

11. Complaints Book (Livro de Reclamações)

As a business, you are required by law to make available a Complaints Book to your clients. Since 2018, this should be in both physical and digital formats. The physical complaints book can be bought from the Casa da Moeda, either from their physical stores or online at https://loja.incm.pt/products/impressos-modelo-1898-livro-de-reclamacoes-actividade-privada-1021907

To obtain the electronic version you should register at https://www.livroreclamacoes.pt/:

  • Scroll down the page and click Entrar below “Fornecedor de bens / Prestador de serviços
  • On the next screen, click “Se não tiver conta, registe-se aqui
  • You will be asked if you have a Portuguese NIPC, or VAT number. This is the correct option, so click the link on this line, which will take you to the Finanças login screen.
  • Fill in your NIF and your Finanças password anc complete the registration details
  • TIP: If you have already registered on this site to make a complaint, use a different email address for your service provider profile, otherwise the platform gets confused.
  • The “Entidade Reguladora” is ASAE and the activity is in almost all cases Alojamento Local: 55201 – Alojamento mobilado para turistas (it should coincide with the economic activity code, or CAE, that you used to register the business activity above)

FISCAL OBLIGATIONS

12. IRS Declarations

NOTE: We are assuming that you declare your earnings as an individual via IRS declarations and the simplified regime of accounting. Other cases are not covered. We recommend that ALL situations be consulted with a specialist accountant.

Yearly IRS declarations should be made, with earnings from Alojamento Local establishments declared in Category B. For Apartments and Moradias, 35% (50% in areas of contention) of total earnings are taxed at your IRS tax rate (which for non-residents is fixed at 25%). Establishments of the type Estabelecimentos de Hospedagem and Quartos have just 15% of earnings taxed, at the IRS rate of the business owner. These percentages are called “coefficients”.

Example: Apartment with total gross earnings of 15.000€. IRS tax rate of 25% (rate for non-residents). In this case, you are liable to pay tax on your IRS for: 15000 x 35% x 25% = 1.312,50€ (one thousand three hundred and twelve euros, and fifty cents).If total earnings from the Apartamento or Moradia category of AL surpass 27.360€, it is necessary to justify expenses of 15% of the total with official invoices, to maintain the rates above.

Note: In the State Budget for 2020, a new measure was passed for the coefficient for Apartamentos or Moradias in “Areas of Contention” to be increased to 50%
.

AL owners can now become exempt from IRS tax on earnings from long-term rentals if an AL registration from before 31st December 2022 is cancelled before the end of 2024, and the property rented out long term. In this case, the owner will be exempt from tax on such rentals (IRS in the case of individuals, IRC for companies) until the end of 2029.

13. IVA Declarations

Whether or not you declare value-added tax (IVA) will depend on if you are registered within the IVA regime or not. From 2023, this is obligatory when you have a declared turnover of more than 13.500€ (or proportional amount) during the previous fiscal year. It is also fiscally beneficial to be in this regime if you have a lot of expenses, for example when using the services of a property management company.

IVA declarations are made every quarter, or you can opt to declare monthly.

IVA is taxed at the special rate of 6% of the price charged to the guest.If you work with booking portals based outside Portugal, such as Airbnb or Booking, you should register your NIF for “Operações Intracomunitárias”, which will mean that these portals do not add VAT on top of their commission rates, but instead use the reverse charge mechanism. Note that if you are exempt from IVA declarations, you should still declare the reverse charge IVA via the Finanças website. You can check if your NIF is correctly registered in this way at the VIES site: http://ec.europa.eu/taxation_customs/vies/

14. Invoicing

Even though most foreign guests will not require the physical document, an official invoice must be issued for every payment. This is done via an officially registered invoicing program, or via the Portal das Finanças. The amount invoiced should be the total amount including any commissions you pay to booking portals such as Airbnb or Booking.

If you are using a program and not the Finanças website, you will have to export the SAF-T file and then upload it to the Finanças website. This is how the fiscal authorities know how much your establishment is earning.

15. Modelo 30 & Retencões na Fonte (tax withholding system)

If you have paid commission or other expenses to any foreign company (e.g. Airbnb or Booking.com commissions), then you should declare this via the Modelo 30 transaction, on the Finanças website, using the Portuguese NIF of these companies (provided by the Finanças, if not known). Strictly speaking, all these companies should provide you with a 21-RFI form and Certificate of Fiscal Residence, but many don’t even know they have this obligation.If a company doesn’t provide a 21-RFI form and the residence certificate, then strictly speaking you are legally obliged to pay a “Retenção na Fonte” (withholding tax) to the state – 25% of the payment made to each company, declared via the Finanças website, and paid until the 20th day of the month following the date of the company’s invoice.

16. Capital Gains Tax

Properties used for the activity of Alojamento Local are no longer liable to a property gains tax charged on Category B of the IRS declaration, unless they are sold in the three years following the termination of the AL activity. In this case, capital gains are calculated at 95% of the difference between the purchase and selling prices, and you are taxed (on Category B of IRS) at your IRS rate on this amount when the property is sold. Simple example:

  • Property bought in 2020 for 200.000€
  • Property used for Alojamento Local starting in 2021
  • Alojamento Local activity stopped in 2022
  • Property sold in 2023 for 300.000€

In the above case, in 2023, when the property is sold, there is a capital gains tax charged at the owner’s IRS rate on 95% of 300.000-200.000 = 95% of (100.000€ minus any deductibles). The owner’s IRS rate for this particular calculation is calculated taking into account the gain on the sale, AND other worldwide income, and is declared in Category B of the IRS declaration.

NOTE: In the case above, if the owner stops the AL activity in 2022 and then waits for 3 years before selling in 2025, no Category B capital gains tax is paid! Category B CGT is the specific tax for AL properties. The normal CGT paid when selling a property still applies and is very roughly 50% of the difference between the purchase and sales prices, minus deductible costs, and taxed at your IRS rate.

17. Social Security

If your earnings derive solely from the activity of Alojamento Local in the Apartamento or Moradia categories, you are not liable for social security payments.

Also, even if you are liable (for example, your earnings derive from the Estabelecimento de Hospedagem category), if you are registering for social security payments for the first time it is usually possible to ask for an exemption for 1 year.Since each situation is different, and often complicated, we recommend consulting the Portuguese Social Security website directly (http://www.seg-social.pt ) or arranging a personal appointment.

18. CEAL Tax

The new housing law introduced a special Alojamento Tax called the CEAL (Contribuição Extraordinária sobre o Alojamento Local), which is applied to certain properties registered as AL on 31st December each year, and charged in June of the following year. For more details, please click the previous link.

19. IMI tax (annual property tax)

The IMI is a fixed tax (set by the municipality) on the VPT value of the property, which you can find on the caderneta predial. One of the coefficients that determines the calculation of the VPT is the age (vetustez) of the property, which can go from 1 (for properties less than 2 years old) to 0.4 (more than 60 years old).

If the property is registered as AL (totally or partially, according to the new law, meaning that it is irrespective of just being one room or the whole property), then the vetustez coefficient is ALWAYS set to 1. This could double the IMI tax in some cases.

MISCELLANEOUS

20. Areas of Contention

Recent Alojamento Local legislation has introduced the concept of Áreas de Contenção, or Areas of Contention. It provides a legal framework for local municipalities to be able to define these areas where Alojamento Local can be restricted, according to a number of conditions, such as:

  • Suspension of new AL registrations
  • Prohibition of transferring the AL licence to another person or commercial entity for Apartamentos or Moradias
  • Limitation of AL licences to a % of registered residential homes
  • Limit of 7 AL establishments registered to the same owner/manager

Each municipality will be able to clarify which areas, if any, are Áreas de Contenção, and which restrictive conditions apply. At the time of writing, Areas of Contention exist only in Lisbon, Porto and Ericeira.

Note: In the State Budget for 2020, the government included the measure for AL properties in the Apartamento and Moradia categories to be taxed on 50% of total earnings (instead of 35%), when in Areas of Contention, and in Lisbon, this is now the case.

21. Useful links

Decree-Law Nº 128/2014 from 29th August: https://dre.pt/web/guest/pesquisa/-/search/56384880/details/maximized

Decree-Law Nº 63/2015 from 23rd April: https://dre.pt/home/-/dre/67059141/details/maximized

Decree-Law Nº 62/2018 from 22nd August: https://dre.pt/web/guest/pesquisa/-/search/116152179/details/maximized

Ordinance (Portaria) Law Nº 262/2020 from 6th November: https://dre.pt/pesquisa/-/search/147814581/details/maximized

The “Mais Habitação” law, Lei n.º 56/2023, de 6 de outubro:
https://diariodarepublica.pt/dr/detalhe/lei/56-2023-222477692

AL Association (yearly fee includes insurance!): http://alep.pt 

Portal das Finanças: https://www.portaldasfinancas.gov.pt/

Social Security: http://www.seg-social.pt/ 

AL registration online: https://eportugal.gov.pt/fichas-de-enquadramento/alojamento-local

Chave Móvel Digital: https://eportugal.gov.pt/pt/servicos/obter-informacoes-sobre-a-chave-movel-digital

SEF Registration: https://siba.sef.pt/

Lisbon Tourist Tax: http://www.cm-lisboa.pt/servicos/pedidos/pagamentos-taxas-e-tarifas/taxa-municipal-turistica-de-dormida/o-que

Porto Tourist Tax: http://www.cm-porto.pt/turismo/taxa-turistica_17

Centros de Arbitragem: http://www.consumidor.gov.pt/gestao-ficheiros-externos/ral-documento-explicativo-sobre-o-artigo-18-da-lei-1442015-pdf.aspx

Guía Técnica de AL: https://business.turismodeportugal.pt/SiteCollectionDocuments/alojamento-local/guia-alojamento-local-out-2018.pdf 

Ficha Técnica da ASAE: https://www.asae.gov.pt/ficheiros-externos-2019/ficha-tecnica-fiscalizacao-alojamento-local-pdf.aspx

Areas of Contention maps for Lisbon: http://lxi.cm-lisboa.pt/

Author/Copyright: Roger Warwick. All rights reserved.

Date: 7th October 2023

Email: info@lisbonapartments.com

Website: https://www.lisbonapartments.com

Annex: Changelog

2023-10-07: Version 2.0

  • Major update due to the Mais Habitação housing law.

2023-05-06: Version 1.9b

  • Several minor updates to text.

2022-03-06: Version 1.9

  • Section 2: RNT link updated.
  • Section 3: Included mention of new IRS rate for contention areas.
  • Section 10: Updated links for Complaints Book
  • Section 12: New VAT threshold.
  • Section 18: LXI map link updated

2021-02-25: Version 1.8

  • Section 15: Small correction for the Capital Gains Tax example.

2021-01-05: Version 1.7

  • Section 15: Update of the Capital Gains Tax rules according to the 2021 State Budget
  • Section 18: Added link to the 2020 Ordinance (Portaria)

2020-03-10: Version 1.6

  • Sections 15 & 17: Further clarification of information regarding the of the 2020 State Budget

2020-03-10: Version 1.5

  • Sections 15 & 17: Confirmed information regarding the of the 2020 State Budget

2019-12-29: Version 1.4

  • Sections 15 & 17: Added comments regarding the provisory version of the 2020 State Budget
  • Section 18: Added link to Lisbon Area of Contention maps

2019-06-10: Version 1.3

  • Section 10: Added new section with information about the Livro de Reclamações

2019-03-28: Version 1.2

  • Section 2: Added brief info about inspections after registration
  • Section 3: Added info about AL being permanent residence
  • Section 17: Added link to Ficha Técnica da ASAE and reorganized other links

2019-03-28: Version 1.1

  • Section 2: Update on Chave Móvel Digital information
  • Section 3: Example given of IRS tax paid
  • Section 4: Information added about insurance from ALEP
  • Section 10. Another IRS tax example
  • Section 15: Rephrased social security info for clarity
  • Section 17: Added Useful links

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LisbonApartments.com

Roger Warwick was born in Leeds, England. He lived for 22 years in Madrid before moving to Portugal in 2010 and now holds dual nationality, English & Portuguese. He speaks English, Portuguese & Spanish, and understands basic French. In 2009, while still living in Madrid, Roger and his future wife Paula bought 4 small apartments in Lisbon, and then started a company, QuietZone Lda, to manage tourist rentals (Alojamento Local) in these properties. In the following years, Roger & Paula initiated a booking portal for tourist rentals in Lisbon, managed nearly 30 such properties for other owners, and bought, renovated, and managed a 9-room guesthouse. Their company, QuietZone Lda, eventually obtained the AMI licence, allowing it to operate as a real estate agency, concentrating mainly on long-term rentals for other owners, but also mediating several sales and purchase transactions. Roger and Paula have also bought and sold several properties and tracts of land over the years, meaning that they have been present in dozens of deeds signings. Lastly, Roger, via the QuietZone company, also acts as a buyer’s agent, representing and accompanying clients at every step of the purchase process, and basically providing a free consultation service for buyers.