NALLE

Home » Posts tagged 'local lodging'

Tag Archives: local lodging

Archive

VN de Gaia to cap “AL” offerings

The Vila Nova de Gaia Municipal Council has passed regulations to limit Local Lodging establishments and prevent the dislocation of long-term residents from historic neighbourhoods. The city centre and the entrance to the bridge D. Luís I are two of the target areas for the new restrictions. These measures follow on the heels of similar actions taken in Lisbon and other municipalities around the country.

Local Lodging: 11 registration cancellations per day

In the past six months, almost 2,000 “AL” enrolments have been wound up. Many owners have stopped letting but failed to cancel their registrations due to capital gains tax liabilities. In the first quarter of 2019, new “AL” sign-ups fell nationally by 40% and by 60% in Lisbon. These numbers are likely to be understated. In total, the capital currently counts with 18,000 Local Lodging Establishments. Nationwide, there are approximately 83,000.  2020 could prove to be a year of mass exodus.

Two more “AL” restricted neighbourhoods in Lisbon

The Lisbon Municipal Council has prepared regulations which delimit the “’containment areas” to Local Lodging according to the law that came out last year. To the five neighborhoods that have been suspended since October 2018 from new holiday lets registrations – Bairro Alto, Madragoa, Castelo, Alfama and Mouraria – will be added two more: Graça and Colina de Santana.

“ASAE” has just one inspector for every 10,000 AL’s

There are more than 80,000 Local Lodging Establishments in Portugal and only eight inspectors from “ASAE” (Autoridade de Segurança Alimentar e Económica) to oversee them. Lack of safety and health conditions are the most common problems. But the capacity to intervene is “very limited”.

Mandatory Insurance for Local Lodging

Insurance providing civil liability coverage guaranteeing the property against damages caused by guests and third parties is required of all operators responsible for “AL” services. The minimum capital per claim is €75,000. Entities operating “AL” units that are part of a condominium must also have coverage guaranteeing property damage caused by fire in or from the “AL” unit. These insurances are mandatory for all Local Lodging establishments registered after 21 October 2018. Their absence is grounds for cancellation of “AL” registrations. Units registered before this date have up to two years to meet the requirements.

“AL” booking commissions may be tax deductible

If you are a  Local Lodging operator, you can deduct online platform commissions from your  “AL” income. Keep in mind that this deduction is only applicable if you opt for the taxation rules of Category F (rent), not under Category B (sole trader).

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.

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.

Renting rooms may imply losing “IMT” discount

The Tax Authority can now claw back “IMT” tax breaks when owners engage in Local Lodging or letting rooms to students. If you bought your home as your “personal and principal residence”, you paid a lower property transfer tax (“IMT”) at the time of purchase. According to a recent “AT” ruling, if within the following 6 years you practice holiday or student letting, Finanças can rescind the tax break and retroactively reclaim any additional tax due.

More than 80% of Local Lodging offerings are second homes

In Portugal, there are ±1.1 million second residences, according to National Statistics Institute data, comprising 80% of “AL” offerings. These dwellings have a low utilisation rate: less than 30 days a year. When engaged in Local Lodging, the average yield per owner is €11,000 euros. Lisbon and Porto tell a different story. In these two urban areas, “AL” is driven primarily by investment properties, not second residences, and foreign buyers.

%d bloggers like this: