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The Government will ban the issuing of new local accommodation (AL) licences, making an exception only for licences for "rural accommodation in municipalities in the interior of the country where rural accommodation can make an important contribution to the economy of that territory".
The announcement was made this Thursday afternoon by Prime Minister António Costa at a press conference after the Council of Ministers approved a package of measures for the housing sector.
António Costa also said that the current licences for AL, already granted "will be subject to re-evaluation in 2030, to see if it is justified or not to keep them". After that, he explained that every five years "they will be subject to periodic revalidation".
The Government will also grant tax relief to those who put AL properties on the rental market. "We will allow all landlords who currently have property in local housing and transfer it to the rental market an income tax exemption from now until 2030 if they take their property out of local accommodation into housing market by the end of 2024." So those who between February 2023 and the end of 2024 transfer their ownership in AL to housing accommodation will be "entitled to zero taxation on property income until 2030".
The creation of an "extraordinary tax" on real estate property was also announced, which will go to the Housing and Urban Rehabilitation Institute (IHRU), but its value is yet to be defined.
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The Portuguese Government going after small businesses again, who are just trying to make some extra income. The big businesses and hotel groups must be applauding this move. They will have less competition and will be able to increase their prices while paying Portuguese workers the minimum wage.
By Marcus from Lisbon on 17 Feb 2023, 12:59
The Portuguese Government going after small businesses again, who are just trying to make some extra income. The big businesses and hotel groups must be applauding this move. They will have less competition and will be able to increase their prices while paying Portuguese workers the minimum wage.
By Marcus from Lisbon on 17 Feb 2023, 12:59
I think the main issue is most short term let properties aren't licenced anyway.
By Terry from Algarve on 17 Feb 2023, 15:34
Once again Socialist interference in housing that will do more harm than good. If AL businesses are to pay an 'exceptional' tax, they'll simply pass this on to their customers, causing US to pay more for our vacations. Nice one!
Why would anyone want to convert short-term AL into a long-term rental when the govt has come up with another crazy scheme to limit rent increases (there's no limit to the amount you can increase your rates for short-stay AL), and even going as far as the govt planning to pay landlords rent on behalf of a defaulting tenant in arrears of three months or more. So the govt runs people's lives for them, and thinks it always knows best.
By Billy Bissett from Porto on 17 Feb 2023, 22:17
Honestly most countries should probably be doing something similar. Short term rentals and especially Airbnb's have contributed very much to the housing crisis, making buying or renting to live increasingly unaffordable for many.
By Louis Franklin from Porto on 17 Feb 2023, 22:29
The AL properties are a curse in the Algarve where housing shortage has reached epic proportions. On some streets, the AL sign appears on almost every building. These properties are let out to tourists during the holiday season and unavailable to those who really need a permanent home - professionals like teachers, medical staff, and other skilled workforce.
In order to keep basic services running, the lack of affordable housing needs to be resolved.
By Annie from Algarve on 18 Feb 2023, 10:11
Very good news. Anything the government can do to incentivise landlords to bring their properties back into the rental market is a welcome measure. Next step rent caps please!
By Henry from Lisbon on 18 Feb 2023, 11:01
The government wants to be seen doing something, but actually do nothing.
If the government (on every level) wanted to solve the problem then they would establish public real estate companies that build and/or renovate and later on rent apartments/houses at a price that "their clientele" is able to pay.
By Tom from Lisbon on 18 Feb 2023, 12:37
Airbnb is nothing but a cancer on the housing market.
It has destroyed the long term rental market.
It has destroyed neighbourhoods which are now in effect soulless hotel rooms
It benefits nobody except the few airbnb landlords
There should also be a three strikes and your are out law that bans Airbnb properties after three noise or other anti social behaviour complaint against them.
Many of us are distraught at having to put up with temporary renters that have zero regard for the neighbourhood they have had the privilege of being able to stay in.
The Algarve has become impossible for workers to get housing.
That will lead to more eyesores of the trailer parks that have appeared next to algarve shopping.
The government need to act fast before its too late
Airbnb is an evil we do not need
By James from Algarve on 18 Feb 2023, 15:18
@Annie - without tourism to support the region's economy, there will be no need for teachers as all the young will emigrate to more prosperous countries.
By Alex from Algarve on 18 Feb 2023, 15:53
As a responsible host in Hawaii I've seen 1st hand how Airbnb has ruined Hawaii cities & neighborhoods because Airbnb DOES NOT take any accountability for guests! Hosts input house rules for guests to follow but Airbnb rarely ever backs up the host when a guest breaks these rules, for example "Quiet Hours 8am-10pm". Guests are on VACATION and that's all they care about. This behavior has a domino affect in a negative way changing neighborhoods and the locals feelings towards tourists. Other Cities/Countries are smart to ban Airbnb's now before it's too late. Greed does not bring happiness it just drives a wedge between everyone involved!
By Michelle from Porto on 18 Feb 2023, 16:32
Alex a flawed defense there I'm afraid. No one renting an AL needs a schoolteacher for either themselves or their children as they are on holiday or they wouldn't be renting an AL property in the first place. Unless there was nothing else to rent which brings us back round to the problem. I fully support this initiative and have been warning people about this insidious problem for years. The only people who seem to support it are AL owners...strange that.
By Andrew Cossins from Beiras on 19 Feb 2023, 09:11
Andrew, tourism accounts for a quarter of Portugal's GDP, and ALs provide more than half of the capacity available. Reducing this sector without anything else to take its place will have a negative impact on the wider economy, job availability and wages. Portugal already has some of the lowest wages in the EU and this is one of the main reasons young people emigrate. Without young families, there's no need for teachers.
By Alex from Algarve on 19 Feb 2023, 10:59
The lack of affordable housing stems from all the bureaucracy surrounding zoning and project approvals. There is a vast amount of land that is zoned for REN/RAN (ecological or agricultural reserves). Water shortages in the Algarve-for instance- make most of this zoning pointless. There are new hotels planned for the Algarve too, so they will profit from the tourist rates and the locals will be left with the crumbs... low ROI on their capped long-term rentals and increased wear and tear on their assets.
To resolve the housing shortage quickly, re-zoning needs to be facilitated and encouraged and projects need to be approved for sustainable low-cost housing and perhaps joint ventures between the public and private sector.
By Leonardo from Algarve on 19 Feb 2023, 22:47
Some of us have been here long enough to remember the rental world before AL when there was no control and almost none of the income was declared. Most second homes many years ago were actually owned by residents of Lisbon and Porto with little desire to declare rental income. Since the introduction of AL a huge amount of extra taxes are now paid to the state where once there was next to nothing. In addition, property prices have climbed as the Portugal has become a more desirable place to live. Once again, purchase taxes are paid to the state or local authority and there is a vast IVA contribution from building works carried out. Would it not seem logical for the state to use this tax income to fund affordable housing alongside a buoyant property and tourism market place rather than trying to trip up the investors that contribute so much to the economy ? This government should be promoting growth and investing in local needs which at this time are houses. Rather than biting the hand that feeds them the government should be looking to encourage investment so it can use the taxes it generates to assist those who need assistance not inventing knee jerk solutions that simply will not help.
By Chris from Algarve on 21 Feb 2023, 15:39
Thrilled. We live on the Silver Coast and WEEKLY, we have had things broken here at our condominium because of AL renters. 2 people will rent, then they bring 10. The owners make the big bucks and the renters trash the place-and the owners lie about the rules and boundaries of the condo rules. End them! People are desperate for housing-not just for 9 months!!
By Ollie Hubbell from Beiras on 22 Feb 2023, 17:43
I see people here seem to have picked one side of the argument or the other, but surely there is a middle way. For example, rather than ban ALs completely, what about limiting their supply. For example, no more than 20% of properties can be AL in a particular geographic area. Maybe the figure is 15%, maybe 25%, but a blanket ban seems like an over reaction in a country that depends so heavily on tourism.
By Gerry BALL from Algarve on 27 Feb 2023, 12:31