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Local Lodging to be exempt from Social Security

Beginning in 2018, taxpayers with earnings exclusively from Local Lodging (Category B) will be exempt from SS contributions. Those who accumulate salaried income with self-employment earnings from “AL” will only be excused from monthly Social Security payments on their green receipts below a gross of €2,450 per month. Any excess shall be assessed at the rate of 21.4%. The measure is expected to encourage “AL” compliance which has already quadrupled over the past three years.

Local Lodging and GEDIPE

Like any tourist offering in Portugal, AL operators are required to pay a small royalty fee when supplying television, radio or an internet connection in their villa or apartment. However, for non-hotel establishments with less than ten rooms, the cost is just €12 per annum.

GEDIPE is the abbreviation for the national agency for authors’ rights. The Association also covers television distribution and audio transmissions. Registration is available at:

https://www.gedipe.org/website/gedipe/contact.html (choice of language at the bottom of the page).

Water invoices

AL Business owners may now find higher water bills in their mail boxes. Once local councils find out that a property is engaged in local lodging, they can reclassify the business, instead of “domestic” or “comercial” as “diversos”. In this case, the water costs more than for a private residential property. One consideration which may justify the increase is the fact that AL creates more rubbish and waste water, and as a result, the City Hall has to increase these basic services.

Budget 2018

The State Budget has been passed and there are no major changes to the AL system: no limitations in number of days per year, and no tax increases are coming our way. The exception hits the entrepreneur who earns more than 27.300€ per year with Local Lodging (or as a Sole Trader in other areas); these businesses will have to prove 15% of their costs by presenting the respective invoices to arrive at the 65% exemption.

Local Lodging: tax revenues double

Tax receipts from Local Lodging (“AL”) grew from €69,000,000 to €123,000,000 between 2015 and 2017, as revealed by the Secretary of State for Tourism, Ana Mendes Godinho. “AL” license registrations also increased almost twofold from 28,000 to over 50,000 over the same period.

Proposal to grant municipalities the power to limit Local Lodging

Adjustments to current regulations for Local Lodging intended to regulate and respond to excessive volume are being prepared, according to the Secretary of State for Tourism. Integration of holiday letting into the formal economy has been the focus of successive changes to legislation in recent years. In July, new measures were introduced mandating that reservation platforms such as Airbnb or Booking.com identify official registrations of all available accommodations for travelers.

Proposal to distinguish between small and large Local Lodging businesses

The Left Block, a partner in the governing coalition, proposes changes to current Local Lodging legislation. Under the soon-to-be recommended plan, holiday letting not exceeding 90 days per year should continue to benefit from the current tax regime. Year-round operation – without a limit of days and designated as “tourist accommodation” (Habitação turística) – must be equated with a hotel activity and assessed on the same basis.

Local Lodging owners may pay greater condo charges

The Government is studying a new requirement for Local Lodging that would mandate higher condominium levies for owners who engage in holiday lets. If adopted, it would collide with another bill where the condominiums would be given the power to authorise, on a case-by-case basis, the possibility of owners renting short-term to tourists. The latter proposal was made in absentia and without the governmental consent.

University residences to function as summer Local Lodging

The Portuguese brand, Lifecooler, announced that it is transforming university residences into Local Lodging during the peak summer months. A pilot project began this August in Lisbon. Designated as “Rooms & Experiences”, the initiative started with a residence with 48 rooms and 68 beds located in the Lumiar district.

Local Lodging owners may pay greater condo charges

The Government is studying a new requirement for Local Lodging that would mandate higher condominium levies for owners who engage in holiday lets. If adopted, it would collide with another bill where the condominiums would be given the power to authorise, on a case-by-case basis, the possibility of owners renting short-term to tourists. The latter proposal was made in absentia and without the governmental consent.

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