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Theft increase in Lisbon “AL” Establishments

The distraction of holidaymakers and the lack of security at some “AL” flats have led to a rise in thefts at Local Lodging establishments, mainly those located in the  “Baixa” district of downtown  Lisbon. In response, law enforcement (“PSP”) has started a prevention program with the owners called “Blue Lock”.

Lagos to initiate Tourist Tax

Following the general approval by the Algarve Mayors’ group, AMAL, the Council of Lagos is moving forward with a €1.5-a-night Tourist Tax. Mayor Maria Joaquina Matos justified the measure, declaring that the tax will help pay for local projects, cover a lack of investment by central government and contribute to making the region more competitive.

“AL” pays commercial rates for water in several municipalities

The water regulator advocates that establishments used for local housing should pay for water as “non-household” users. The increase is already in place in several councils. However, there are other centres, such as Lisbon, where the municipality has reimbursed the extra charge.

Message to our NALLE Members and Partners

Since NALLE started to offer its services in February 2015, the Local Lodging industry has undergone profound changes. A small business sector which started out with 15.000 units, has grown, with 75.000 units to date, to be a real competition to the hotel industry in Portugal.

In 2015, there was a real lack of access to information in regards to the rules and regulations. Nowadays, the information on how to open and run such a business can be easily found online. ALEP, our Portuguese counterpart, is doing a good job in terms of information and workshops to enable owners to run their business successfully and in compliance with the law.

NALLE can now be considered to be an additional information service, adding on to many others, and we feel that we are not essential to the market.  Also, we have not been able to attract enough members over the years to cover our running costs.

We have therefore decided that we are going to provide the service until the end of 2019, without charge to our existing members, and to discontinue our work from then on.

Thank you for your support and attention!

With kind regards

Dennis Swing Greene

President

NALLE

 

Tourist Tax doubles in Lisbon

Staying in a hotel or local lodging accommodation in Lisbon became more expensive as of the first of the year due to the increase in the Municipal Tourist Tax from one to two Euros. The local municipality estimates additional revenues from the measure of ±_35 million in 2019.

Airbnb commissions tax deductible for Category F

Local Lodging operators who opt to be assessed under the tax rules of Category F (long-term rentals) may deduct commissions from this income paid to online reservation platforms. However, those carrying out their tourist business under Category B as Sole Traders do not deduct specific expenses but rather are automatically allotted 65% from their gross “AL” income to cover operating expenses.

Local Lodging increasingly under third-party management

An increasing number of accommodations under Local Lodging (“AL”) are in the hands of third-party administration. In Lisbon and Porto, only 4 out of every 10 units registered in this tourist activity are handled directly by the owner.

Tourists down, income up in Summer 2018

Portugal received 128,000 fewer foreign visitors this summer than in the same period last year, a drop largely due to fewer holidaymakers from the United Kingdom. Between June and September, 5.5 million travellers came to Portugal, down 2.2% when compared to the same period in 2017. However, revenues rose to 1.7 billion euros during the period, up 4.4%.

Proposed “AL” insurance in the 2019 Budget

The ink is barely dry on changes to the Local Lodging regime and the ruling Socialist Party is moving forward with proposed amendments in the next year’s State Budget. According to the contemplated update, Local Lodging units should have a minimum coverage of €75,000 a year per claim. The recently approved legislation is vague concerning the amount of liability insurance required.

Sole Traders to have new basis for Social Security contributions in 2019

The rules governing Social Security contributions for self-employed workers are changing in January. Graduated income tax brackets will no longer be the reference point. Payments will be based on 70% of declared earnings in the previous three months, rather than on the total of sole trader income from the previous year. The rate of contributions also drops from 29.6% to 21.4%. Freelancers will have to submit a quarterly statement to determine the relevant income, which will be the basis for Social Security assessment in the following trimester.

Earned income can be adjusted by up to 25% (up or down) so that workers can elect to pay a higher or lower amount that will eventually be reflected in benefits. The new rules also establish a minimum monthly Social Security payment of €20, including periods with no recorded income, as a way to ensure on-going social protection coverage, rather than the start-and-stop method that was used in the past.

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