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New
legislation regarding short term holiday rentals requires attention and action.
EXECUTIVE
SUMMARY
The new law (Decree Law 128/2014 of 29
August) regulating the Local Lodging (Alojamento Local) obliges you to also
register as a business activity with the Financas (Finance / Tax department).
In addition you need to inform Town Hall.
This came into force on the 27th
of November and owners have 30 days after this date to hand in the proof of
Business Activity Registration (inicio de actividade) at the local council to
avoid penalties. Deadline is the 26th of December 2014.
The change in the legislation changes the
reporting of rental income on your Portuguese tax return as income is now
received from a business activity it will be filed under section B instead of
section F. This means a substantial reduction on the tax payable. Under The
Simplified Tax Regime the tax payable is a flat tax rate of 25% tax to be
payable on the 15% of rental income (the other 85% is exempt), meaning that the
final tax rate is 3.75% of your total rental income.
As a business activity, you will also have to
register at the Social Security department.
The 1st year you are exempt from paying social security and this can
be extended if you are a pensioner or can proof you are already making
contributions back home.
For each letting you need to issue an invoice
for the renter. The following month you need to report this to Financas (and
your accountant).
In addition you will have to inform SEF
(Immigration and border control) when guests are foreigners about the arrival
and departure date and the local lodging venue.
In all marketing of your rental property you
must mention the AL
license number.
Homeowners who do not have their property
registered for local lodging there is no deadline, however, you still need to
apply and register at the Finance department and Town hall and until the
license (and license number) is issued you can not advertise your property.
Otherwise penalties can be applied.
Robert Bijker
Director
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