FOR IMMEDIATE RELEASE
Lisbon, July 6 2023 – In a significant development, the Portuguese Parliament has approved the suspension of all new Alojamento Local (AL) registrations in specific high-density areas, targeting the modalities of Apartamento and Estabelecimento de Hospedagem when implemented in residential horizontal property buildings. The legislation excludes interior areas defined in Annex 2 of the ordinance, as outlined in the official document: [link to the ordinance].
Once the law comes into effect, it will impose a temporary halt on the registration of new AL accommodations. The final general vote is expected to take place on July 19th, after which the President will have three options: approving the law, vetoing it and sending it back to Parliament for changes, or submitting it to the Constitutional Court for judgment.
Here follows a quick summary by Roger Warwick of the measures for AL (short-term rentals) approved yesterday by Parliament:
- suspension of new Al registrations in the Apartamento and Estabelecimento de Hospedagem categories when implemented in a horizontal property (condominium building), except in low density areas defined in the Annex of this ordinance: Portaria n.º 208/2017 de 13 de julho
- new AL registrations in condominium buildings require unanimous approval of the condominium.
- existing AL’s in condominium buildings can be closed with a 2/3rds majority vote
- existing AL registrations become temporary, and must be renewed every 5 years starting in 2030.
- if owners of properties wth an AL registration from before 31st December 2022 cancel the AL before the end of 2024, and put the property on the long-term rental market, they will be exempt from tax on such rentals (IRS in the case of individuals, IRC for companies) until the end of 2029.
- the new CEAL tax was approved at 15%, and applies only to autonomous residencial units (not detached houses in the Moradia category) or complete buildings. It also doesn’t apply to AL in the permanent residence of the owner, if not active for more than 120 days per year.
The decisions, primarily intended for high-density areas such as the Algarve, Lisbon, Porto, and coastal states, aims to manage the impact of AL accommodations in these regions on the local housing problems. The suspension specifically targets future AL registrations while allowing existing registrations to remain unaffected, though other measures may impact those, such as restrictions on transferring the registration title holder.
Once passed into law, there is significant concern that all attached properties will see their value decrease overnight as AL licenses are not transferrable and all new licenses are suspended. This means the only option to create a return would be to rent out their property as a long term which in turn has potential of significantly decreasing the cost of long term rentals due to the influx of new rental units coming on the market.
It is important to note that until the law comes into effect, all AL registrations are still permissible. Furthermore, if the property in question is a detached house, owners will still be able to register it as an AL under the Moradia categoria, even after the law is passed.
The final text of the law will be drafted in the coming days or weeks and published in the official gazette, Diário da República. It will become effective the day after publication, unless otherwise specified. It is worth mentioning that potential legal challenges may arise both at the national and European levels, which could impact the implementation of the law.
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Scott Kirk CEO BuyProperty.com firstname.lastname@example.org www.BuyProperty.com