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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.
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.
Lisbon will increase the Municipal Tourist Tax in 2019, from one to two euros per night, to strengthen urban cleaning and transportation in neighbourhoods with more pressure from tourism. Initially approved in 2014, the Municipal Tourist Tax began to be applied in January 2016 on the overnight stays in the hotel units or local accommodation, then set at one euro per night up to a maximum of seven euros.
From March to October, tourists will be charged €1.50 per day, up to a maximum of seven consecutive days. Lisbon has also been negotiating to double its Tourist Tax to €2. The Algarve Tourist Tax is expected to yield 20 million euros per year to Algarve municipalities. These revenues are to be used in inter-municipal projects in the areas of tourism promotion, heritage rehabilitation and cultural interventions.
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.
In 2016, the 1.6 million inhabitants of Barcelona were “overwhelmed” by more than 32 million tourists who “overloaded the city”. The City Council has approved legislation to limit the influx of tourists after more than 25 years of intense promotion of the city as a tourist destination. The plan will only have an impact after 2019. The tourism industry opposes the new plan, which says that the legislation “demonizes tourists.”