There may be a variety reasons for you to discontinue an “AL” business: a) you need your place for yourself; b) the property may be up for sale; c) the bureaucracy may be too cumbersome for you; d) competition may have driven down prices and the activity is no longer profitable, e) other. Whatever the motive that you no longer wish to continue to let short-term furnished accommodations to holidaymakers, there are several steps that you will need to take to make the change: Continue reading
Attentive to Local Lodging activities, the tax man is tightening its grip on owners who fail to report and pay their taxes. Online platforms may soon be required to share information on customers, according to the Jornal de Notícias. The aim of the Portuguese Revenue is to avoid fraud and tax evasion. To this end, the ministry is studying ways to force the holiday letting reservation platforms to report “AL” operator data to Finanças.
The “AT” (Tax Authority) has revealed plans to review the Location Coefficient (“CL”) of immovable properties by the end of August. The new localisation factor will be approved by the end of the year, coming into effect in January 2020. Finanças targets updates to the Ratable Value of real estate (“VPT”) at 85% of average property prices in each location.
If you are a landlord and, during the term of a lease, increase your tenant’s rent by the amount of inflation (the maximum allowed by law), you must inform Finanças what the new rent will be. This communication to the Tax Authority is mandatory and can lead to the payment of a 10% Stamp Duty on the amount of the monthly rent increase.
The new value must be communicated through the “AT” website by the end of the month following the month in which the change occurs. Payment can be made at the Local Finanças office, at an ATM or via electronic banking. When communicating the change online, you will be issued a payment note with the multibanco payment reference on the “AT” website.
If the amount due is less than €10, there is a technical exemption, and no tax is due. For example, you charged a monthly rent of €500 in 2017. The inflation adjustment percentage is 1.15% or €5.75. The difference is less than €10 so no Stamp Duty is due.
The Finanças web site will offer an automatic income declaration option for taxpayers to confirm the pre-completed tax information. Over the next few years, all taxpayers with income from Portuguese employment and pensions (currently reporting in the first phase) will have this alternative available.