Latest Updates on the Vacation Rental Law – AL Madeira
2023 / 2024
More Housing – Law No. 56/2023, dated October 6, 2023
The aforementioned legislation came into effect on October 7, 2023, introducing significant changes to the rules governing the licensing of vacation rentals – Alojamento Local (AL).
The following information on these changes has been gathered from various sources, and it is strongly recommended to consult your accountant or legal advisor regarding your specific situation.
Key Changes for Vacation Rental AL Licenses:
1. Non-transferability of AL License:
– The AL facility’s registration number is now personal and non-transferable, except in the case of inheritance.
2. Condominium Veto Power:**
– Condominiums can express opposition to a vacation rental AL. If AL activity is conducted in an autonomous unit (apartment) of a building, the condominium can pass a resolution with at least two-thirds majority against the practice of AL activity. Exceptions include instances where the building’s deed explicitly allows the use of apartments for AL purposes, especially in urban areas exclusively designated for tourism, or if there is an explicit resolution from the condominium approving the use of apartments for this purpose.
3. Extraordinary Contribution for AL Apartments:
– An additional tax contribution of 15% is imposed on apartments, payable in June of the following year. Whether this tax also applies to houses in AL is still unclear.
4. New License Duration:
– New AL licenses issued after the enactment of this law are valid for 5 years.
5. Reassessment of Existing Licenses:
– Existing licenses issued before this law will be reassessed by 2030. If the license is accepted for renewal in 2030, it will be valid for 5 years. The reassessments, in both cases (new and existing licenses), will be conducted by the local Câmara Municipal.
6. Expiration of Inactive Licenses:
– Within two months from the effective date of this law (October 7, 2023), AL license holders must provide evidence of maintaining activity by reporting it on the RNAL platform – Registo Nacional de Alojamento Local (National Register of Local Accommodation) via the Balcão Único Eletrónico (Single Electronic Portal). Failure to comply will result in the cancellation of the corresponding licenses by the decision of the President of the local city council. However, this does NOT apply to AL licenses used for accommodation in one’s permanent residence, provided that this activity does not exceed 120 days per year. This registration must be completed by December 7, 2023.
Please instruct your accounting to carry out this registration, as it will disclose your income tax return from your vacation rental. If you received your AL license in 2023 and have not rented it yet, we are unsure which document should be attached. In the case of a rental, possibly receipts issued to AL customers in 2023. More details on this point will be published in Publico on November 29, 2023.
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