picture for Rent in the Algarve Live rentals

Holiday Rentals in the Algarve Portugal

Rental Licences - the Alojamento Local....

The Portuguese Holiday Rental Licence, Alojamento Local

There is no longer a ‘licence’ as such...


Please read this page in it’s entirety


Over recent years, there have been many articles in the Portuguese press (and online), relating to the legal requirements that must be met when renting properties to Holiday Makers, and the ‘dire’ consequences of not fulfilling those requirements. This has been seen by many over the years, as nothing more than “scaremongering”...


But there is a growing consensus, that change is in the air...


It is widely reported that the ‘system’ is now ‘simplified’... but there are several aspects which many people are not fully aware of, particularly by those who are non-resident in Portugal. Resident or not, providing accommodation to Holiday Makers in Portugal, is seen as “running a business” and necessary legal requirements have to be met in Portugal, and the country of residence of the Owner/Operator of the property.


On the 21st April 2015, there was a mammoth non-stop, (over 4.5hrs), “one shop” seminar in Faro, in the Algarve, organised by “Safe Communities Algarve”, bringing together an impressive line up of presentations put forward by various ‘authorities’ on the subject of lettings. There was a ‘Full House’, attended by an audience of some 300 people, eager to learn more about the requirements of the Decree Law 128/2014 of 29th August 2014.


The following information was obtained from that seminar, but we must stress that the accuracy of the following information, and it’s fullness, cannot and must not be relied upon. As pointed out at the seminar, changes are frequent, but the basics are here, and proper legal advise must be sought... Advice, on where to seek advice, (for Owners/Operators, individuals &businesses related to lettings in Portugal), was given at the seminar, and we pass this on later in this page...


Before letting a property in Portugal you must register your business activity with the Tax Authority. Business Activity Registration (Inicio de Actividade), can be made online if resident. Non-residents or their fiscal representative must submit paper forms at the local 'Finances' (tax authorities). If appointing a Fiscal Representative, 'Power of Attorney' must be issued to deal with fiscal matters directly to Finances. Owners who are currently exercising Local Lodgings under the prior statutes, must still confirm their business activity registration with Finances.


There is no longer a 'licence' as such. One is required to register a “Local Lodging” activity, by written notification to the Mayor of the local municipality, and is known as a “mera comuniçacão prévia”. The following is required:

Name, address, identification documents of the Owner/Operator.

Identification and the location of the property to be let.

The type of property and occupancy capacity.

The anticipated start date of the business.

Contact details in case of an emergency.


Copies of the following will also be required:

When not the Owner, proof of legitimacy of it's operation.

A rental contract if property is let to an Operator.

The business registration (“Inicio de Actividade”) as previously mentioned above.

The “Caderneta Predial” (Land tax registration booklet from Finances).

Terms of Responsibility, assuring that the property meets all the necessary requirements and full responsibility is accepted for the proper conditions of the property. The Owner/Operator must sign to accept full responsibility that the required standards have been met. These include: Stating the capacity of the property, (permanent beds); Infrastructure; Hygiene; Safety Standards. Whilst the majority of requirements are really nothing more than common sense, it is advisable to exceed the basic requirements as one would be in better standing in the event of an accident. Example: It is currently not required to fit smoke alarms.


After submitting this to the local council, the council communicates with the “Balcão Único Eletrónico” the “One-Stop Clearinghouse” which links the appropriate government entities. They issue the identity number for the local lodging establishment. Note that a local lodgings business cannot commence until this number has been issued.


Like all business activities in Portugal, one is required to issue invoices to clients. Mandatory invoices are issued via the internet and information can be found by searching “sistema de emissão de recibos verdes electrónicos”.


An “IRS” declaration must be filed in May, following the tax year. Categories B and F exist, and are determined how your business is conducted. If for example Owners are invoicing the Holiday Maker directly, then Category B would apply. You have an 85% allowance (to cover business expenses) and pay 25% tax rate on the remaining 15% which in other words, equates to just under 4% of the gross invoiced amount. If on the other hand Owners invoice Holiday Makers through a holiday management company, the Owner would be taxed in category F at 28% which is seven times higher than that of Category B.

To prevent double taxation, a double taxation treaty with Portugal prevents being taxed twice. So, as an example: UK residents (who must declare world-wide income), and having paid 4% tax in Portugal, and for example fall within the 20% tax bracket in the UK, (income up to £45,000), the tax liability on the rental income would be 4% to Portugal, and 16% to the UK, (4% + 16% = 20%).


Like any business in Portugal you must register for VAT (“IVA”). After the first year, if the annual income exceeds €10,000 then VAT must be charged (currently 6% for tourist-related activities).


Social Security is mandatory throughout the EU. Starting any business in Portugal, you must register your business, and you must register in the area where the property is. Those currently paying into Social Security regimes elsewhere, are usually exempt.


When signing the “Terms of Responsibility” (see above), one is declaring that everything is in order and that an Energy Certificate will be available to prospective clients. For a certificate, one will need: technical drawings of the property; the “Caderneta” (from Finances); the registration Certificate, (from Registry Office). Charges vary upwards of €150 + vat, (depending on property size), and there is a small charge payable to “ADNE” – the Portuguese Energy Agency, from €35 + vat.


Wherever the property is advertised, (print or electronically, eg, paper or website), it is law to display the “AL” (abbreviation for Alojamento Local) and the registration number. This is a very distinct method to exhibit compliance and registration, meant to be visible to prospective Holiday Makers and inspectors. Failure to display this information can lead to fines and can be added to any other non-compliance issues.


A sign indicating the whereabouts of a complaints book, (“Livro de Reclamações”) is required. In Portugal it is mandatory to have a complaints book for the public to register a complaint in establishments which perform services to the public. Currently there is new legislation being prepared to launch an electronic version, (presumably online for when the Holiday Maker has returned home ?). For now, a complaints book can be purchased from www.consumidor.pt  or www.incm.pt


AL Signs are no longer required to be displayed at the entrance to apartments and villas.  As we understand, apartments and villas with existing signs with numbers included, are no longer valid since new registration numbers are issued.


For any foreign citizen (including nationals of other member states of the EU), if they are paying for their accommodation, they must complete and sign a lodging registration form approved by the Ministry of Internal Administration. This is a requirement by SEF, Serviço de Estrangeiros e Fronteiras, (Immigration and Border Services).

One spouse may report and sign for the whole family, (a tour group may be signed for by a representative). Their arrival must be reported within 3 days of arrival and again reported within 3 days of their departure. There exists a scale of fines for non-compliance. There are 3 methods of submission – the method which doesn't require any specialised software is via a portal and is via on-line fill-in forms. Unfortunately the website is currently only in Portuguese, http://siba.sef.pt/


“ASAE” is the Portuguese regulatory authority for Food & Economic Security. ASAE is responsible for monitoring economic activities and that they comply with the relevant legislation. There exists tables showing potential “Cumulative fines” relating to the infraction and range from Eur 10,650 to EUR 271,500  These are the fines that have been often quoted over the years, as  a means of ‘gently persuading’ Owners to comply with regulations.


Over the last several months, there have been numerous newspaper, online articles and rumours, ranging from: A surge of Inspectors on the look-out for non-compliance; Inspectors posing as potential Holiday Makers; Insurance companies refusing to ‘pay-out’ when illegally renting properties; Holiday reviews - dates being scrutinised by tax inspectors for non-disclosure; Utility companies obliged to report ‘spikes’ in energy consumption, (to identify occupancy)....


Thank you for taking the time to read this basic outline of requirements. The advice given at the seminar in Faro, was to become a member of “NALLE” - The National Association of Local Lodging Establishments. www.nalle.pt  is their web site, their contact number is  +351 213 424 210 and they provide essential information and support to their members.



Algarve rentals direct from Owners with “AL” registration numbers.

By law - Owners must always advertise their “AL” registration number.


Advisory note: Travellers and Owners - always check what is covered by your insurance.


NALLE - The National Association of Local Lodging Establishments

providing information and support to enhance security and compliance in Local Lodging operations in Portugal.


The Algarve’s Only Estate Agent

Broadcasting ‘Live’ from the Algarve










The Algarve’s Only Estate Agent

Broadcasting ‘Live’ from the Algarve