Holiday home insurance and taxation

By Advertiser, in News, Business, Property · 23-04-2021 01:00:00 · 0 Comments

Brexit has raised many issues for UK property owners and their insurers, and since 31 January regulations apply to any UK resident with a Portuguese fiscal number and who is absent from Portugal for more than six months in a year, so it is worth noting the regulations and reminding you of your obligations and your responsibilities regarding your home insurance.

Portuguese fiscal regulations require that if you spend less than six months a year in Portugal, you must appoint a fiscal representative in Portugal to liaise with the Portuguese tax authorities in all aspects of taxation relating to you and your Portuguese property. They will arrange for you to be notified of all taxes due and pay the bills on your behalf upon receipt of your payment.

As the United Kingdom is no longer a member of the EU, unless you have Portuguese residency, you may only remain in Portugal for a maximum of 90 days in any 180 day period without a visa. This means that the first day of your visit is also day 1 of the 180 day period, so you cannot stay for 180 consecutive days, claiming that your first 90 days were the last half of a 180 day period and the next 90 days will be the start of the next 180 day period.

These regulations will inevitably impact on the amount of time that you are permitted to spend in your Portuguese holiday home so it is sensible to review your insurance cover to ensure that it meets your needs.

Most insurers have certain requirements for a property that is left unoccupied but unfortunately, few people read the policy wording, so the relevant conditions are often not even known of, so not met, which can affect your policy and any claim.

When a property is left unoccupied it must be properly secured and it is prudent to turn off the water where it enters the property. Whilst some insurers do not require that the water must be turned off, it is always a condition that the property owner must take reasonable steps and precautions to protect the property from loss or damage. Therefore, if a property suffers excessive water damage because the water supply has not been turned off, it can be viewed as failing to take reasonable precautions to avoid this type of damage.

Whilst we live in a warm climate and the chance of a pipe bursting due to freezing conditions is remote, it does not mean that it never happens as some areas of Portugal can suffer below zero temperatures in winter, but pipes and other water fittings can, and do, burst by other means so it makes sense to turn off the water in the house when you are not in residence. If you have automatic irrigation or a gardener visits regularly, this should not cause a problem as most houses have a valve where the mains water supply enters the property plus a separate valve where the water supply enters the house.

With regard to security, insurers will generally refuse a burglary claim if there is no sign of forced entry – in other words, if a door or a window is left unlocked, or even open, insurers are unlikely to look favorably on a claim. Additionally, if you fail to adhere to a minimum security clause you run the risk of a claim being refused. Review your policy schedule and policy wording to confirm this.

If you let your property for holidays, you must obtain an Alojamento Local (AL) licence, which also requires that you arrange a specific AL liability policy, and you cannot use the liability cover that is automatically included in a home insurance policy in place of the AL liability policy. Ibex can help you to arrange this specific policy but the two levels of liability under the AL policy are just €75,000 or €150,000 so could be totally inadequate, and this is where Ibex can help. Whilst you cannot forego an AL policy, you can take a policy for the minimum cover and extend the existing liability cover in your Ibex home insurance policy to include tenants, which will then supplement any valid liability claim up to €2million.

The simple message is “Check your policy” and if you have any doubts, your local Ibex staff will be happy to review your existing policy and cover and give an honest and unbiased opinion on any benefits or shortcomings in that policy.

Call into one of our offices in Almancil or Tavira to discuss your needs and how we can help or call us on 800 860 653 / 289 399 774 for Almancil or 281 325 842 for Tavira. Or if you prefer, send an e-mail to algarve@ibexinsure.com



Related articles


Comments:

Be the first to comment on this article
Interactive Topics, send us your comments/opinion on this article.

Please note that The Portugal News may use selected comments in the printed edition of the newspaper.