Renting out your holiday home: Legal Requirements

Tax Obligations for Residents and Non-Residents

If you own property in Portugal and plan to rent it out as holiday accommodation to paying guests, you are required by Portuguese law to declare your rental income - whether you are resident here or not.

You will have to register with the Portuguese tax authorities and fill out a Portuguese tax return each year, usually under Category B (Self-Employed) or Category F (Property Income).

Whereas residents must declare and pay tax in Portugal on their worldwide income, non-residents need only to declare and pay tax in Portugal on the income they earn in Portugal (this includes holiday rental income).

How to get started

Step 1: Get a NIF (Fiscal Number)

The first thing you must do is get a Fiscal Number (NIF), a unique 9-digit number used by the Portuguese tax authorities for identification purposes.

Step 2: Register your business activity

Once you have a fiscal number, in order to legally start earning income in Portugal you must declare the start of your activity with the Portuguese tax authorities (Finanças).

Step 3: Access your tax account online

To access your tax account online, you must sign up with the Portal das Finanças online - this will allow you to fulfil all your tax obligations from wherever you are.

Step 4: Access your tax account online

Finally, you must register your property as an Alojamento Local - a Local accommodation establishment. Registration is obligatory and failure to comply can, and does, result in heavy fines.