Alojamento Local

Share experience regarding ownership of property and/or living in Portugal.

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shaz1967
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Alojamento Local

Post by shaz1967 » Sun Nov 11, 2018 9:05 pm

Hello fellow members.
I have heard that they have made it a lot easier to obtain a tourist licence the "Alojamento Local" Has anybody recently obtained an AL ? I am going to obtain one for next year although I only have a few family members stay I do charge them a nominal fee to cover costs & I think its a good idea to have one.

widge
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Re: Alojamento Local

Post by widge » Mon Nov 12, 2018 7:58 am

You may find that the "nominal fee" you charge members of your family will no longer be sufficient to cover your increased costs. If its only family I'd stay under the radar and call the "gifts" you receive Birthday presents ! :P

shaz1967
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Re: Alojamento Local

Post by shaz1967 » Mon Nov 12, 2018 5:27 pm

widge wrote:
Mon Nov 12, 2018 7:58 am
You may find that the "nominal fee" you charge members of your family will no longer be sufficient to cover your increased costs. If its only family I'd stay under the radar and call the "gifts" you receive Birthday presents ! :P
Hi widge thanks for your reply, i thought that once you had paid for thr gas&electric safety inspections then got your licence from the authorities you just paid any tax due on your rental income that was over a certain amount?

widge
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Re: Alojamento Local

Post by widge » Tue Nov 13, 2018 9:13 am

When registering it is possible to opt for one of two tax regimes: the Simplified Regime or the Organized Accounting Regime.

Under the former, the record keeping is simpler. One is taxed on 35% of the total rentals received, with no allowable deductions. If you are non resident, the tax rate is 25%, making an effective tax rate of 8.75% of gross income – versus 28% under Category F income. If you are resident in Portugal, the tax rate depends on your general IRS rate bracket taking into account your other income.

In any event, registration of the commencement of business form is imperative this year and a prerequisite for application of the Local Lodging license under the new rules.

There are other formalities to be observed: the house or apartment must be registered with the local municipal council, by way of a prior communication to the addressed to the Mayor via the “Balcão Unico Electronico” (Single Electronic Counter) – which is free of charge. This may be followed by a physical inspection of the property to ensure it has the basic amenities – sanitation, running water, fire equipment, complaints book etc.

shaz1967
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Re: Alojamento Local

Post by shaz1967 » Fri Nov 16, 2018 2:08 pm

Hi widge
Thank you for your informative replies. I am not very up to speed with all this to be honest could I pick your brains again with some scenario's please , so if I rent my property out for 6 weeks to family & for easy reckoning purposes I charge them £500 per week giving me a total rental income of £3,000 how much would I have to pay to the tax man?
I am already sorting the gas & electrical safety certificates out as regardless of renting or not I think it is prudent to have safety checks as a matter of course.
The property is up to standard regarding toilets etc & I already have a fire blanket & a fire extinguisher.
I am ok with all the gust book & other things but I am more concerned about how much tax I will be paying on the nominal rental I maybe charging.

widge
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Re: Alojamento Local

Post by widge » Fri Nov 16, 2018 6:32 pm

Hi Shaz1967,

6 weeks at £500 = £3,000 which is presently about €3,300. Tax payable is 8.75% = €289.

Hope that helps.

shaz1967
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Re: Alojamento Local

Post by shaz1967 » Fri Nov 16, 2018 8:07 pm

widge wrote:
Fri Nov 16, 2018 6:32 pm
Hi Shaz1967,

6 weeks at £500 = £3,000 which is presently about €3,300. Tax payable is 8.75% = €289.

Hope that helps.
Thanks widge that does help & i am thinking that its not too bad & if thats the only monies i have to pay it may be worthwhile registering.

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Re: Alojamento Local

Post by widge » Sat Nov 17, 2018 7:42 am

How old is your villa ? When I had mine tested (built c.1995) for the electrical certificate I was informed that none of the sockets met the latest safety regulations. Replacing every socket was an expensive and unexpected exercise.

shaz1967
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Re: Alojamento Local

Post by shaz1967 » Sat Nov 17, 2018 10:11 am

widge wrote:
Sat Nov 17, 2018 7:42 am
How old is your villa ? When I had mine tested (built c.1995) for the electrical certificate I was informed that none of the sockets met the latest safety regulations. Replacing every socket was an expensive and unexpected exercise.
[/quoteHi widge, the villa is 10/11 years old built 2007/8 which I believe is when the more stricter building regs were in force, I have the original builders spec from the build which details every aspect of the construction electrical work, plumbing work etc.

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Re: Alojamento Local

Post by Farol » Tue Dec 04, 2018 11:01 am

If you are only allowing family to stay there then I would not consider it a commercial rental and just ask for a contribution to the running cost - if they are family you should be able to trust them to take care of the place and to chip in to the cost. For family it would never enter my mind to consider it to be a rental.

To me it's a bit like giving people a lift in your car (at least in the UK). You cannot charge them a fixed fee without having a private hire licence and business insurance etc etc but they can chip in towards your running cost as long as it is within the HMRC rules - care shares normally do not break any HMRC rules nor invalidate your insurance. I just use this as a simile.

There must be loads of people with second homes that do not rent out commercially but do allow family (&friends) to stay and only get a nominal contribution to cover gas, water & electricity - I cannot believe that many if any of them would ever consider an AL.

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Re: Alojamento Local

Post by Geoff » Fri Dec 07, 2018 6:57 pm

I've just read the latest Sovereign briefing on changes to AL. Lot more bureucracy and potential expense!

carolyn
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Re: Alojamento Local

Post by carolyn » Tue Dec 11, 2018 10:18 pm

Seems to us that they are trying to tax legitimate renters out of existence!

widge
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Re: Alojamento Local

Post by widge » Thu Dec 13, 2018 9:42 am

8.75% tax on your total rental income seems very reasonable to me !

Income tax & IVA are more than double this.

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Re: Alojamento Local

Post by Geoff » Thu Dec 13, 2018 9:56 am

Problem though if its classified as " long term" rent is that its 25% of 95% of income (cf 25% of 35% ) ie 24%...which is what is likely if rentals all done through a management company.

widge
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Re: Alojamento Local

Post by widge » Thu Dec 13, 2018 11:16 am

Long-term property lets (usually having a rental contract between landlord and tenant) are included in Category F and are reported on “Anexo F” in the second filing period in May. This activity is different from short-term holiday lets which are seen as a business called “Local Lodging” and reported on Annex B – self-employment income.

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