Scams: Beware with holiday rentals

The consumer group, “Deco”, and the “PSP” warn of potential dangers with vacation rentals, especially when using the internet. Every year Deco receives dozens of complaints related to scams associated with holiday home lets. While the internet can be the dominant means of publicizing and reserving holidays, it is essential to use care, especially when making online payments.

CDS party wants to distinguish between individual and multiple Local Lodging operators

The centrist party has presented a draft resolution to the legislature, recommending that the Government distinguish between occasional vs permanent provision of AL services. This suggested distinction preserves the notion of periodic operation of one’s principal residence and / or secondary residence. Under the proposal, the total number of properties under management should not exceed two.

AL registration number now required

Beginning 01 July 2017, any website advertising local accommodations in Portugal must display the corresponding AL registration number. Failure to do so will lead to fines from a minimum of €125 to maximum of €32,500 as mandated in Decree-law nº80/2017.

Local Lodging: not just peer-to-peer

According to the Hotel Association of Portugal, in November of last year, 25 operators had multiple “AL” registrations: between 51 and 300. Of these, seven were running more than a hundred properties as “Local Lodging establishments,” up to a maximum of three hundred. While the majority of owners let just one or two properties, current “AL” legislation fails to distinguish between those operating on a peer-to-peer basis and those running full-blown “horizontal” hotels.


Capital Gains Tax and Asset Allocation in Category B

Potential Capital Gains Tax liabilities have caught by surprise many owners engaged in Local Lodging when using privately owned property in a sole trader business activity. As scary as it may sound in theory, the practice is generally far more benign in most cases as we can see in the following illustration. (more…)

Tourism continues to set records

Guests in tourist accommodations increased to the highest level in 10 years during the first quarter of 2017. Madeira’s hotels recorded the strongest occupancy rate (75%), followed by Lisbon (67%) and Porto (63%).  Nationwide, foreign visitors are up 10% over a 12 month period. By nationality, the largest rise came from Brazilians (68%), Polish (40%) and Americans (34%).  Urban tourism is one of the major trends in demand. The country’s security is perceived as one of the main criteria, followed by climate, culture and cuisine.

Portugal pioneers in Local Lodging

Innovation in the regulation of local lodging has made Portugal a case study. Short term holiday letting is an integral part of the current Portuguese tourism boom. Dilapidated heritage districts in Lisbon and Oporto have a new lease on life with private investment driving much needed restoration. As with any phenomenon of rapid and disorderly growth, distortions have emerged. But this should not be a pretext to kill the chicken that lays the golden egg.

Long term lets continue to rise in Lisbon

Living in Lisbon is increasingly expensive. The tourist boom in recent years has triggered rental price hikes in the country’s capital. The latest study reveals that apartment leases rose 23% in 2016, to an average of €830 per month. In the Chiado district, purchase costs average €6,700 per square metre.

No changes in Local Lodging law before the end of 2017

With all political parties submitting their own proposals, the parliamentary calendar will only consider changes to the law governing of local lodging next year. The ruling Socialist Party wants to make permission dependent on the approval of neighbors in condominiums.

Landlords investing in private student residences

Private student residence letting is a burgeoning business that reconciles some of the vagaries of short term lets common in local lodging with the stability of medium term rentals while avoiding the ongoing commitments endemic in long-term leases. In university cities like Lisbon, Porto and Coimbra, the average price for a student room currently runs around €350 per month.

July 2017
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