NALLE

Landlords exempt from capital gains tax

Owners who remove their properties from Local Lodging and make them available for long-term letting can be spared mandatory CGT assessment. This push to long-term letting integrates the government’s package of proposals in the 2018 State Budget. Once confirmed, this measure will be the only Capital Gains Tax refuge once an owner stops an “AL” activity.

Advantages of spending holidays in an “AL”

A new study by HomeAway reveals why Portuguese nationals prefer using Local Lodging for their vacations. For 79.5% of the respondents, choosing an “AL” accommodation is based on the possibility to prepare meals, thus making significant savings in the overall holiday budget. 70.2% of respondents prefer the scheduling flexibility and the ability to plan their vacation days without rigid time restrictions. In turn, 65% indicate that they can enjoy more space for leisure activities. 51.5% of holidaymakers appreciate the privacy and tranquility (as compared to 37.2% in hotels).

“AL” accommodations continue to multiply

Local Lodging accommodated one third of visitors to Portugal in 2017, an annualised increase of almost 29%, according to ALEP (Association of Local Lodging in Portugal). As of July 2018, there are currently more than 72,000 Local Lodging establishments registered nationwide.

France with largest tourist accommodation offerings in the EU

France is the EU country with the highest number of tourist beds available. According to 2016 data collected by the European Statistical Office, the French tourist industry registered 5.1 million beds or 16.4% of the EU total. Italy ranked a close second with 4.9 million beds (15.8%). Spain placed third with 3.5 million beds or 11.2%. Over the same period, Portugal recorded approximately 567,800 tourist accommodations, an increase of 16,100 beds (+3%) when compared to the previous year.

Airbnb Tourist Tax rendered 2.6 million euros in the first half of 2018

Airbnb, the internet Local Lodging reservation platform, collected and delivered €2,600,000 in Municipal Tourist Tax during the first six months of the year, reaching a grand total of €8,100,000 raised on behalf of the Lisbon Council since the tax began in January of 2016. In 2017, the aggregate holiday let levy revenues came to €18,500,00 taken in by the country’s capital city.

INE presents 2017 “AL” statistics

According to the National Statistics Institute (INE)*, Portugal received 3.4 million Local Lodging guests in 2017 (+29%), and 8 million overnight stays (+26.7%), generating €263 million in total revenues (+27.6%). The number of overnight stays increased in all regions, most significantly in the Center (+42.3%), Greater Lisbon (+31.4%), Madeira (+22.5%) and the North (+25.2%). The average Local Lodging stay was 2.35 nights (-1.6%), with longer stays in Madeira (4.80 nights), Algarve (3.23 nights) and Lisbon (2.37 nights). Germany was the tourist largest market (+27.4%), followed by the French, British and Spanish (+22.3%, +20.9% and +31.5%, respectively). There were also significant increases from Poland (+79.8%), the United States (+64.8%) and Brazil (+54.6%).

*  INE only counts “AL” offerings with more than 10 beds. Following this criteria, there were only 2,663 “AL” establishments in Portugal in 2017. According to the Ministry of Tourism, “AL” registrations currently total over 85,000. While the INE numbers may be inaccurate, these statistics can still prove useful on a relative basis.

Half of “AL” establishments in Oporto belong to companies

A study carried out by the movement “Oporto is not for sale” reveals that, among the 6,198 Local Lodging registrations in Portugal’s second largest city, 51.3% are enrolled by companies. The leading company holds 70 properties while there are 84 “AL” enterprises exceeding the legal limit of 7 registrations.

ASAE closes three “AL” operations

Thus far this summer, ASAE has carried out 610 raids on Tourist Enterprises and Local Lodging establishments throughout Portugal. The operation led to the suspension of three “AL” operations for non-compliance with hygiene requirements. The investigating teams instituted 111 administrative actions and a criminal proceeding, primarily for infractions regarding non-registration of a tourist activity.

Tourist offerings grow across the board

Local Lodging is not the only type of tourist facility to grow in 2017. Hotels, aparthotels and rural hotels as well as tourist villages, apartments and inns also displayed dynamic results with more new units opening and record occupancy rates last year. In the case of “AL”, the majority of the increase is due to registrations of pre-existing units.

Whistle-blowers help Tax Authorities recover unpaid “AL” taxes

Reporting possible tax evasion in Local Lodging and failure to issue invoices by merchants allowed the Portuguese Revenue to collect an additional €1,000,000 in 2017. The anti-fraud division of the “AT” received and analysed 2,618 complaints and accusations of which 2,153 were made by other public entities, and 465 came from complaints by private individuals.

November 2018
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