Before you can rent out your holiday home to paying guests, you must register your property with the authorities as a Local accommodation establishment, Alojamento Local.
Alojamento Local are establishments that provide temporary housing services to tourists, for remuneration, and must comply with the legal requirements of the Alojamento Local regime, (Decree-Law no. 128/2014, of August 29, amended by Decree-Law no. 63/2015 of 23 April).
The establishment should meet the following requirements:
Be in good condition;
Be equipped with appropriate furniture, equipment and utensils;
Have windows or a balcony to the outside that ensures adequate ventilation and aeration;
Be connected to the public water supply network or have access to a private water supply system that is properly registered and controlled;
Be connected to the public sewer system or equipped with septic tanks with a maximum capacity according to the size of the property;
Provide shutters or curtains to block out natural light;
Be equipped with hot and cold running water.
Have lockable doors where necessary for security and privacy
Always adhere to general cleaning and hygiene conditions
How to apply
There is no rental license as such, just a simple registration process that can be done in person at your local Câmara Municipal (Town Hall) or online (providing you have a Citizen Card, European Digital Certificate or Digital Mobile Key).
Name, address and Fiscal Number (NIF) of the owner/person intending to carry out the activity;
Start date of your activity;
Capacity (rooms, beds and users);
Valid authorisation of use, ‘autorização de utilização ou título de utilização válido’ - it is the responsibility of the competent Municipal Council to authorise, on a case by case basis, whether your property is fit to be used for accommodation purposes, taking into consideration the ‘accepted generic uses and existing safeguards’. For this reason, you may want to obtain a habitation license;
Signed declaration that your property is suitable as a Local Accommodation establishment;
Emergency contact details.
Fiscal Number (NIF);
Land Registry document, ‘Caderneta Predial’ - issued by your local finance department and valid for 12 months;
Lease agreement, Deeds or other document that legitimises your right to rent our your property;
Declaration of Commencement of Activity, ‘Declaração de Início de Actividade’ – a tax document issued by your local finance department.
How Long Does It Take?
Providing you are able to supply the required documents and information, a registration number is issued immediately, upon which you can begin the provision of accommodation services.
How much does it cost?
The registration process itself is free, however there may be a number of associated costs involved to ensure you have the right paperwork and that your property meets the required criteria.
Associated Costs and Obligations
You are legally obliged to purchase an official Complaints Book (Livro de Reclamações) and have a notice clearly stating its existence and availability. Non compliance can result in a fine between €250 and €3,500.
To purchase a Complaints Book online through the official site click here.
As of July 1, 2017, an online version of the Complaints Book will be available for the Essential Public Services sector (electronic communications, utilities and postal services) - soon, this feature will be available for all services, however the paper version of the complaints book will still be mandatory.
If a guest files a complaint, the original complaint sheet must be sent to the relevant entity (Autoridade de Segurança Alimentar e Económica, or ASAE), within a 10 working days. Records must be maintained for a period of at least three years.
Fire Safety Equipment
Local Accommodation establishments with a capacity equal to or less than 10 users have to comply with the following security requirements:
Have extinguishers and fire blankets in adequate quantities, accessible to the users;
Have first-aid equipment accessible to users;
Display the national emergency number (112) in a place visible to users.
Cost: from €70, excluding VAT
To purchase a complete Fire Safety Kit for your holiday rental property, click here.
Your respective City Council may, within 30 days of registration, carry out an inspection (visitoria) of your rental property to ensure it meets the required criteria.
Both the Tourism Board and the Food and Economic Security Authority (ASAE) can also carry out inspections at any time.
Cost: €75 (based on current prices in Albufeira)
Under Portuguese law, you are required to register your paying guests with the Portuguese Border Control, ‘Serviço de Estrangeiros e Fronteiras’, (SEF). In the case of a family travelling together, this obligation can be fulfilled by one spouse or, in the case of a travel group, by one member of the party.
The communication is made to SEF through the online electronic platform, SIBA - Sistema de Informação de Boletins de Alojamento.
First, you must register your property with SIBA as a ‘new hotel unit’.
Then, for each booking, you must provide the following guest information:
Failure to comply may result in fines ranging from €100 to €2,000.
Other Applicable Legislation
In addition to the rules set out for Alojamento Local, you must also comply with the following general legislation:
Maintenance and Inspections of Gas Installations
Periodic inspections of your gas equipment must be carried out by accredited inspectors every 2 years (Decree-Law n.º 521/99, 10 December).
If you wish to equip your holiday rental property with a video surveillance system, it is mandatory to notify to the National Commission for Data Protection (CNPD) by filling out an online form. (Article 27, Decree-Law n.º 67/98, 26 October).
A no-smoking sign must be displayed in your rental accommodation. If a kitchen is available to your guests, a prohibition sign for the sale of alcoholic beverages to children under 16 must also be clearly displayed.
You must supply the instruction manuals for the electrical appliances in the accommodation or, failing that, information on operation and handling.
Online Disputes Platform
The Online Dispute Resolution platform is an online complaints arbitration platform set up and maintained by the European Commission to help resolve national and cross-border consumer disputes. In order to allow your guests to file a complaint, you are required to provide a link to the ODR Platform. (Regulation (EU) No 524/2013, 21 May 2013).
The capacity of the establishment is determined by the number and type of beds (fixed or convertible), with a maximum 9 bedrooms/30 guests.
1 single bed = 1 guest
1 double bed = 2 guests
1 single bunk = 2 guests
1 double bunk = 4 guests
Declaring the Start of your Activity
To register your activity with the Portuguese tax authorities, you must visit your local finance department, (Finanças), or go online to the Portal das Finanças, and fill out a Declaration of Commencement of Activity form, ‘Declaração de Início de Actividade’.
Your activity will fall under the Economic Activity Code CAE 55201 (Furnished accommodation for tourists) or 55204 (other places of short-term lodging).
You will need your passport, Fiscal Number (NIF), and an estimate of your annual rental income.
Your document will be stamped and issued immediately, for free.
Income Tax (IRS)
Rental income is always taxable in Portugal, whether you are resident here or not.
Your rental income will usually fall under Category B - Business and Professional Income, and you will have to fill out a tax return each year.
Tax rates are tiered according to level of income. To view Portuguese income tax rates 2018, click here.
If you spend less than 183 days a year in a country that is not your home country, you will normally remain tax-resident in your home country. In this instance, you must declare and pay tax in Portugal on your rental income only, and pay tax on your worldwide income in your home country.
To avoid being taxed in two different countries at the same time, most EU countries have bilateral tax treaties in place to avoid double taxation when it occurs.
You should note that the tax rates in the two countries involved will most likely be different. The Portuguese tax actually paid can be offset against the tax due in your country of residence, but if the tax rate is higher in your country of residence, further tax will be due.
To declare income received from each booking, you must issue an invoice to you guests (Article 36 of the CIVA Code). This can be done in two ways:
Through a recognised online portal (paid); or
By filling out invoice-receipts through the online finances portal, Portal das Finanças, (free).
To find out how to fill out invoice-receipts (also known as 'green receipts'), click here.
Those who opt for the simplified scheme and have annual incomes of less than €10,000 are exempt from VAT under Article 53 of the CIVA Code.
For income above €10,000 you must charge VAT at the reduced rate of 6% on all receipts, and submit quarterly VAT declarations through the Finance Portal, where a document is subsequently issued to pay VAT.