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“AL” and potential Capital Gains Tax

The withdrawal of a property from a Local Lodging tourist activity was already potentially subject to capital gains assessment under previous legislation. However, the way the law was drafted left room for doubt as to the exact point that the tax would be due. In the 2018 State Budget, this doubt was clarified, making it unambiguous that there is deferred payment of capital gains tax when the property is further assigned on an ongoing basis to income from category F (long-term rental). Without this abeyance, a Capital Gain may be attained in the year of cessation of the business assignment. Regardless, reporting is done in your annual “IRS” return.

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Airbnb commissions tax deductible for Category F

Local Lodging operators who opt to be assessed under the tax rules of Category F (long-term rentals) may deduct commissions from this income paid to online reservation platforms. However, those carrying out their tourist business under Category B as Sole Traders do not deduct specific expenses but rather are automatically allotted 65% from their gross “AL” income to cover operating expenses.

Rooms almost at the price of a flat

Letting a bedroom in a private home in Greater Lisbon now costs on average €308 per month – the most expensive in the country – with growth in prices of 14% in 2017. Interest in room rentals, a traditional form of housing for university students and young workers, has quintupled the number of searches carried out over the past year. Due to increased demand, the cost of letting an individual room has risen to an average of €238 per month in Portugal.

Long term lets continue to rise in Lisbon

Living in Lisbon is increasingly expensive. The tourist boom in recent years has triggered rental price hikes in the country’s capital. The latest study reveals that apartment leases rose 23% in 2016, to an average of €830 per month. In the Chiado district, purchase costs average €6,700 per square metre.

Airbnb studying entry into the long-term rental market

The holiday accommodation platform, Airbnb, is interested in offering long-term lets to help its customers base find homes to live in. This initiative builds on the company’s already existing experience. Since 2011, Airbnb has included a sub-lease section on its website in more than 5,000 cities, listing houses and apartments for rent by the month.

Local Lodging in the winter season

With wintertime coming, many property owners may want to take the easy road and accept long term rentals (more than 30 days) from tourists who wish to enjoy the Portuguese climate during the winter.

This is not Local Lodging but long term rental. A written contract has to be drawn up and registered with the TAX Office. Owners under the age of 65 have to issue monthly electronic receipts. All owners have to send a Summary to the Tax Office after the period has finished. In the tax declaration, this income will be declared under Category F, with a tax rate of 28%, In this case, certain costs can be deducted.

Controls on Renting

In an effort to entrap non-compliant landlords, utility companies must now report periodically consumption data of supposedly empty villas and apartments to the Tax Office to verify whether or not there is effective occupancy.?????

 

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