Opening Local Accommodation

To open a local accommodation (AL) business in Portugal, it is essential to understand the mandatory legal and tax requirements. Here are the main aspects to consider:

1. Types of Accommodation and Capacity Limits

  • Modalities: Houses, apartments, rooms, or guesthouses.
  • Limits: Maximum of 9 rooms and 30 simultaneous guests. The number of guests can be increased with the inclusion of supplementary beds for children up to 12 years old.
  • Restriction: The same owner cannot operate more than 9 apartments in a building if this represents more than 75% of the fractions.

2. Suspension of New Registrations

  • New AL registrations are suspended for apartments and guesthouses in certain urban areas, except in the interior of the country and autonomous regions.
  • Registrations issued until October 7, 2023, will be re-evaluated in 2030 and renewed every 5 years.

3. Registration Process

  • Steps: Open/amend activity at Finanças (Tax Authority), gather documents (use permit, property booklet, etc.), and submit prior communication to the Balcão do Empreendedor (Entrepreneur's Desk).
  • Inspection: After registration, the municipal council conducts an inspection to confirm compliance with the requirements.

4. Tax Decisions

  • CAE: Choose between codes 55201 (furnished accommodation for tourists) or 55204 (other short-term accommodation).
  • IRS: Taxation can be under category B (business income) or F (rental income). Category B may be advantageous with the simplified regime, while category F may apply a fixed rate of 28%.
  • IVA: A 6% rate applies to invoicing, with the option of exemption if the turnover is less than 12,500 euros.

5. Mandatory Conditions

  • Insurance: Fire and damage insurance to cover risks.
  • Safety: Fire extinguishers, fire blanket, and first aid.
  • Communication of Foreigners' Stay: Notification to SEF within 3 days.
  • Identification Plate: Mandatory, except for houses.

6. Relationship with the Condominium

  • Condominiums may require an additional contribution to cover expenses resulting from intensive use of common areas and have the power to cancel licenses issued without approval.

7. Best Practices

  • Presentation: Realistic photos and descriptions.
  • Organization and Cleaning: Organized and properly sanitized spaces.
  • Quick Responses and Personalization: Customer attention and personalized touches, such as suggestions for local visits.

Conclusion

Complying with these legal and tax requirements is crucial to avoid fines and ensure business success. Evaluate all options before investing, ensuring efficient and profitable management.

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What is Legally Required for Local Accommodation?

According to paragraph 2 of Article 13 of Decree-Law no. 128/2014, of August 29, local accommodation with capacity for less than 10 guests must comply with the following safety requirements:

a) Provide a fire extinguisher and a fire blanket easily accessible to users;
b) Have a first aid kit accessible to guests;
c) Display the national emergency number (112) in a visible place.

Furthermore, except for AL registrations in the "villa" category, all local accommodation establishments must affix an approved sign identifying the establishment as Local Accommodation at the main entrance.

Local Accommodation activity was initially regulated by Decree-Law no. 128/2014, which established the main legal obligations for this type of accommodation. This decree defined the need for equipment such as fire extinguishers, fire blankets, first aid kits, and appropriate signage, requirements that are still valid.

In 2018, Law no. 62/2018 introduced some changes to this regime, adjusting and clarifying certain legal aspects.

More recently, Ordinance no. 262/2020 brought additional changes, especially regarding the mandatory nature and characteristics of Local Accommodation identification signs.

In the Azores, Local Accommodation establishments also follow a specific regional ordinance, which requires the placement of an identification sign in all ALs.

It is always advisable to check the most up-to-date legislation, as changes or discrepancies may occur between legal publications and available information.