Prices for Local Lodging (“AL”) rose in the historic centres of Lisbon and Oporto during the first half of 2016 according to the “Confidencial Imobiliário Index”. The average cost of “AL” accommodations increased by 4.6% in the historic districts of Lisbon and 0.3% in the centre of Porto.
Lisbon was the fifth most popular destination for European holidaymakers in 2017, registering a 17% jump when compared to the year before. Porto came in ninth place, 12% above 2016. Registering a 24% increase, London was the first choice for European tourists, followed by Barcelona, Mallorca and Paris.
Porto city council approved today a tourist tax of two euros per night for all guests over the age of 13 beginning 01 March 2018. In announcing the new levy, Mayor Rui Moreira said that, in order to ensure Porto’s place as a sustainable tourist destination, holidaymakers must participate in the running costs of the municipality, given the wear and tear inherent in the tourist footprint.
The creation of a Porto Municipal Tourist Tax, which might reach two euros per night, is designed to solve housing problems and omits improvements in the tourism sector, claims the Hospitality Association of Portugal. The City Council explained, “the proceeds of this levy are to be applied in projects aimed at promoting housing for the middle and lower middle class in the historic centre to accelerate the repopulation and curb pressures from real estate development.
Based on the number of overnight stays last year (6.8 million) to be charged at 2 euros per night per person, the total anticipated revenue for the municipality is expected to reach 13 million euros. The city is preparing the process of applying the new tourist tax and anticipates implementing the new levy in January next year.
Guests in tourist accommodations increased to the highest level in 10 years during the first quarter of 2017. Madeira’s hotels recorded the strongest occupancy rate (75%), followed by Lisbon (67%) and Porto (63%). Nationwide, foreign visitors are up 10% over a 12 month period. By nationality, the largest rise came from Brazilians (68%), Polish (40%) and Americans (34%). Urban tourism is one of the major trends in demand. The country’s security is perceived as one of the main criteria, followed by climate, culture and cuisine.
Lisbon and Porto saw the number of properties registered in the local housing increase by 3,400 and 1,300 respectively in 2016. In a new trend, the largest growth took place outside of the historical neighborhoods, where the supply doubled. Lisbon closed 2016 with 6,800 registrations, twice as many as it had in 2015. Of the 13,000 new registrations nationwide, many were due to legalization of irregular situations that already existed rather than brand-new offerings.
According to a recent report issued the Economics and Fraud Management Observatory of the University of Porto, the main causes of tax evasion in Portugal are the burden of direct and indirect tax on businesses and households as well as Social Security contributions. Other causes include the intensity and complexity of laws and regulations (bureaucracy in general) and the lack of credibility of sovereign bodies.