Local Accommodation in Portugal: Municipalities Resume Control Over Issuance of New Licenses

alojamento local em portugal

Recently, the Portuguese Government announced a series of significant changes in the Local Accommodation (AL) sector, promising to transform the way AL licenses are managed in the country. Integrated into the plan “Building Portugal: New Strategy for Housing“, these changes include returning autonomy to municipalities to decide on new licenses and revoking some of the most contested measures from the More Housing package.

This article explores the implications of these new policies and what they may mean for the future of AL in Portugal.

 

The Return of Municipal Autonomy

One of the main changes announced by the Minister of Infrastructure and Housing, Miguel Pinto Luz, is that municipalities will once again have autonomy to decide on the granting of new AL licenses. This decision aims to reinforce the role of municipalities in sector management, allowing a more personalized approach that considers the specifics of each region.

“Municipalities will have a say on this,” said the minister in an interview with Lusa, emphasizing that the autonomy of municipal decisions must be aligned with general legislation. This means that while some cities like Lisbon may choose to restrict new licenses, other regions may continue to encourage the development of AL.

 

Revocation of the Extraordinary Contribution on Local Accommodation (CEAL)

Another impactful measure is the revocation of CEAL, an extraordinary tax that has been widely criticized since its implementation (we wrote about it here). The repeal of this tax is seen as a way to alleviate the tax burden on AL owners, encouraging investment and sector growth.

 

Changes to the Obsolescence Coefficient and IMI

Changes to the obsolescence coefficient, which affects the taxable property value (VPT) of properties and, consequently, the Municipal Property Tax (IMI), are another significant change. Previously, the obsolescence coefficient for properties used for AL was fixed at 1, preventing a reduction in VPT and keeping the IMI bill high. With the new strategy, the Government intends to eliminate this restriction, allowing a fairer assessment and reducing IMI for AL owners.

 

The changes announced by the Government have the potential to revitalize the Local Accommodation sector in Portugal, ensuring a more favourable environment for owners and investors. The decentralization of decisions allows for management more adapted to local needs, promoting tourism and economic development.

Lamares, Capela & Associados provides services in the Real Estate area and has a team of lawyers available to handle legal issues related to AL. For more information, contact us.

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Lamares, Capela & Associados is committed to protecting and respecting your privacy and we will only use your personal information to manage your account and provide the products and services you have requested. Occasionally, we would like to contact you about our products and services and also about other matters that may be of interest to you.

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