On September 10, a decree was published marking the end of the Extraordinary Contribution on Local Accommodation (CEAL), following authorization from the Assembly of the Republic. This measure was part of the More Housing Program and targeted local accommodation in apartments and autonomous units of residential buildings, except in inland areas. Let’s explore what changes with this revocation and the impact on local accommodation owners.
What was the CEAL?
The Extraordinary Contribution on Local Accommodation (CEAL), included in the More Housing Program package, imposed an annual contribution of 15% on local accommodations in apartments and autonomous units. The calculation base included factors such as location and the area of the property.
This contribution applied only to local accommodations located in urban areas, excluding inland territories, which were considered less pressured by tourism and housing demand.
Impact of the CEAL on Owners
For many local accommodation owners, this contribution represented an additional burden, as the 15% was applied to a base that reflected the property’s value, resulting in considerable annual taxes, especially in the more touristy and valued areas of the country, such as Lisbon, Porto, and the Algarve.
End of the CEAL: What Does It Mean in Practice?
As of September 11, the CEAL has been officially abolished, meaning that owners of local accommodations in apartments and autonomous units are no longer subject to this annual contribution.
Additionally, the same decree also repealed the depreciation coefficient, which was previously provided for in Article 44, No. 3 of the IMI Code. The depreciation coefficient allowed the reduction of the taxable property value for older properties, which decreased the IMI to be paid.
With the revocation of this coefficient, the property value of local accommodations can no longer be adjusted based on the property’s age, which may result in an increase in IMI for some owners.
Decree-Law No. 57/2024, which abolishes the Extraordinary Contribution on Local Accommodation and revokes the depreciation coefficient, came into effect on September 11, 2024, one day after its official publication.
Consequences for the Local Accommodation Sector in Portugal
With the abolition of the CEAL, many local accommodation owners will experience fiscal relief, especially those with properties located in urban areas where demand is higher. However, the revocation of the depreciation coefficient may result in an increase in IMI, which requires attention from property owners.
The end of the CEAL does not mean the end of discussions about Local Accommodation in Portugal. The sector still faces criticism for its contribution to the lack of affordable housing in major cities. It is likely that the Government will continue to monitor this market, and new measures may be introduced in the future to regulate Local Accommodation more effectively and fairly.
If you have questions about the impact of the abolition of the Extraordinary Contribution on Local Accommodation (CEAL) or need legal assistance in the real estate sector, our real estate law team is ready to help. Contact us for personalized advice and solutions tailored to your needs.
