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New long-term housing policy

Prime Minister António Costa declared: “We do not have an excess of Local Lodging. We have a lack of affordable housing.” The Government presented its “New Generation of Housing Policies” (NGPH), which includes various measures to stimulate urban rental and rehabilitation. Beyond contributions from the state, the goal is to create incentives for private individuals to place their properties with an affordable lease.”

43% of business travellers use “AL” accommodations

More than four out of ten enterprises follow the trend of leisure tourists and choose Local Lodging for company travel, as revealed in a recent study by the Travelstore American Express. The survey shows that businesses are increasingly confident and express willingness to invest more in travel to Portugal over the course of 2018.

Majority of Local Lodging buildings were vacant

60% of the buildings currently used in Local Lodging were previously uninhabited according to a recent study issued by the Portuguese Hotel Association (AHRESP). Only a minority served as long-term leases to locals. The report also concluded that 56% of the “AL” buildings in Northern Portugal were formerly unoccupied. In the centre, the percentage of empty dwellings was 47% and in the Alentejo, 55%. The Algarve, Madeira and the Azores are still under analysis.

Holiday letting registrations double in two years

The Secretary of State for Tourism, Ana Mendes Godinho, announced that currently there are 59,000 Local Lodging registrations whereas of December 2015 the total was 28,000. She attributed the increase in large part to the legal obligation of digital platforms to display formal enrolments.

Local Lodging beds surpass hotels

 

The number of beds offered in 2017 under Local Lodging in Portugal accounted for 56% of the total. Hotels made up the remaining 44%, according to an analysis by the Association of Hospitality of Portugal (AHP).

Lisbon controversy over “AL”: Veritable hotels registered as “Local Lodging”

There are establishments designated as Local Lodging with standard residential housing permits but which are in reality “genuine hotels”. According to Urbanism Councilman Manuel Salgado, “giving residential housing and Local Lodging the same licensing status is detrimental to the city.” “Real Local Lodging is when the owner lives at home, sharing with holidaymakers. This form of tourist accommodation deserves protection”, stated the Lisbon alderman.

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.

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