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Algarve to charge Tourist Tax in 2019

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.

Algarve councils reject quotas

Local Lodging “has not been a problem for the Algarve. It’s being very positive for the economy and urban regeneration,” according to Faro mayor, Rogério Bacalhau. The Algarve’s municipalities have no plans to create quotas or “containment zones” for Local Lodging, a possibility opened by recent legislative reforms. The Algarve concentrates the majority of “AL” accommodations in Portugal, far outweighing Lisbon and Porto combined.

Local Lodging registrations continue to skyrocket

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.

Foreigners bought 25% of the homes sold in 2017

Last year, 152,000 homes were sold in Portugal, an increment of 25%. French and Brazilian are the foreigners who are buying more properties. The jump in demand also led to a substantial increase in prices: Lisbon up 37%, Oporto 29%, Madeira 24% and the Algarve 18%.

Algarve councils to levy tourist tax

AMAL, the Algarve’s mayors’ group unanimously approved the introduction of a tourist tax for visitors staying in the region’s hotels and local lodging establishments. All municipalities in the region have committed to participating in the new charge. While the tax has yet to be set, it is expected that the final fee will follow the example of Lisbon where visitors pay €1 per night per person. Airbnb, the online reservation platform, helps to collect much of the tax and delivers millions of Euros to the city each year. Alternatively, the Algarve councils may follow the model of Oporto that has recently introduced a €2 per night per person levy. The region’s hoteliers’ association along with local lodging owners are expected to oppose the measure.

Each council plans to retain the money raised in their respective townships to be used “in favour of the development of the Algarve municipalities.” The stated purpose is to use the funds for “culture, combating seasonality and promoting the quality of the Algarve.”

The experience gained from Local Lodging over the years needs to be applied to the Tourist Tax concept. The shift from local statutes to national unity has lead to massive compliance, quadrupling the number of registered “AL” businesses over the past four years. Total registrations now surpass 60,000. Hopefully, the tourist tax concept will eventually embrace country-wide implementation rather than different rules and practices in each of Portugal’s 308 town councils. A comprehensive plan would eliminate local deviations which only create confusion and a sense of unfairness amongst visitors.

If a tourist tax were applied as occurs with “IMI” (Municipal Property Tax), where all municipalities reap the benefits proportionally, leaving tax collection from agents in the hands of the “AT” (Tax Authority), the outcome would increase local revenues while strengthening equity and harmony.

Tourism yields rose 17% in 2016

The aggregate tourism turnover rose 17% last year to 3,075 million euros. The number of holiday makers jumped to 19 million, an increase of 10%. By geographical distribution, the greatest concentration of tourist beds continues to be the Algarve, with one-third of the total. Lisbon accounted for almost 20%.

77% of Local Lodging offerings in the Algarve

According to latest estimates (February 2017), there are now over 33,700 Local Lodging establishments in Portugal. Of these, the overwhelming majority – more than 77% – are concentrated in the Algarve, according to “Confidencial Imobiliário”.

Algarve tourism on track for record year

Algarve hotels have registered 7.4 million overnight stays in the first six months of the year, up 13.3% over the same period of 2015. Algarve Tourism stated that 2016 should be the best year ever. Through June, Faro airport recorded 3.1 million passengers, an increase of 18.6%

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