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Upcoming legislation, designed to regulate Local Lodging, is likely to include measures intended to counteract the “Disneyfication” of historic city centres. According to the current Socialist Party proposals, the imposition of quotas on a selective basis is “an admissible model” that should give a “relevant role to municipalities”. Since 2012, “AL” registrations have skyrocketed nationally from 7,533 to 58,252, a more than 7-fold jump. The increase in Lisbon during this period has been over 400%, primarily in the historic neighbourhoods.
The Government recommends that hostels no longer be classified as Local Lodging (“AL”). The new legislation proposes that this type of offering be registered in the category of “Tourist Development” (“empreendimento turístico”), requiring a more formal licensing process. When the 2008 legislative reform originally introduced this accommodation concept, hostels fell into the loosely defined “Local Lodging” catchall category, rather than within the more tightly regulated “Tourist Development” grouping.
The “AT” (Tax Office) wants to assure that all entrepreneurs receive their correspondence in a secure and unquestionable manner. To this end. all Sole Traders registered for VAT are now obliged to have an electronic post box with www.viaCTT.pt. The viaCTT account must be activated within 30 days after VAT registration. The rule applies to sole traders once they have reached an income of over than 10.000€ in the preceding year. Fines for non-compliance go from €50 to €250.
Diverse and sometimes contradictory recommendations are currently under discussion to modify underlying rules governing Local Lodging. In last year’s budget, numerous changes came into effect regarding the taxation of Local Lodging income. In IRC, “AL” income under the Corporate Simplified Regime lost its reduced 0.04 coefficient, rising to 0.35. In IRS, the changes moved in the same direction: under the Simplified Regime for Independent workers, the 0.35 coefficient also applies. Apartments and villas let under in Local Lodging registrations were excluded from the 0.15 coefficient still available to room lets, hostels and holiday offerings registered under the “Tourist Development” classification.
The Secretary of State for Tourism, Ana Mendes Godinho, announced in a parliament hearing on the subject: “I do not agree that many people have been expelled by Local Lodging. Instead, it has served to rehabilitate our inner cities. We have to manage the evolution of Local Lodging in order to ensure that the cities retain their authenticity. This is not only a concern of tourism but for everyone, including guaranteeing the right to housing.”
In June of 2018, 68,310 Local Lodging registrations exist as compared to 23,136 in 2015, an increase of almost 300% in three years. Over the same period, tax revenues have more than doubled. 73% of “AL” accommodations are outside Lisbon and Porto, with over a third in the Algarve.
There are approximately 2,100 Local Lodging Units in Madeira, corresponding to about 8,500 beds. There has been significant growth in this type of holiday offering, with 430 new registrations in just the past five months. Despite its strong position in the local tourist market, Local Lodging is not perceived to be a threat to Madeira hotels which continue to perform better than ever in recent years.
Marriott International and Hostmaker announced a collaboration to introduce a new holiday home rental undertaking under Marriott’s Tribute Portfolio Homes brand. This venture marks Marriott’s first step into the home-share market, nine years after Brian Chesky founded Airbnb and disrupted the travel industry. The move comes at a time when Airbnb is attempting to step out of its “alternative travel” image, introducing concepts like Airbnb Plus that offer a more curated travel experience. Meanwhile, other traditional hospitality companies like AccorHotels and Hyatt have also launched similar endeavours.
The National Association of Portuguese Municipalities (ANMP) is against most of the proposed changes to present Local Lodging legislation under consideration in the Assembly of the Republic. The ANMP highlights the positive impact of holiday letting on the overall economy of the country in the current moulds.
In 2018, the Government plans to launch, under the framework of the Simplex+2018, a new “citizen card” for foreigners residing in Portugal, which will group in a single document identification numbers for tax (“NIF”), Social Security and the National Health System (“SNS”). According to the Secretary of State, with this new card, the delivery to the foreign citizen of all these identification numbers will happen simultaneously at the same place of issuance, cutting significantly the time and effort required.