At the end of October, a series of new laws regulating the classification of properties as 'Alojamento Local' (short-term rental properties) came into effect. The new laws give councils and condominiums more power to control future AL listings.
The Alojamento Local (AL) regulates the process of legalising private rental properties. The recent changes will mainly affect new properties registering for AL licensing, but there are some changes for those who are already licensed.
Primarily, under the new regime instated on October 23rd 2018, all types of properties that provide short term rental accommodation in exchange for payment are considered AL, not just those intended for tourists as was previously the case.
The new rules include ‘areas of containment’ which will only apply to new registrations, to preserve the social character of neighbourhoods. These ‘containment zones’ are defined by the local authority, and mean a single owner can only operate a maximum of seven local accommodation establishments. These areas will be re-evaluated at least every two years.
Another change included in the new laws is that local councils and condominiums have the power to intervene in future AL registrations. This means councils and other property owners in a building can have a say in whether or not a particular property can be let for short term rentals. Existing AL owners could also be asked to pay up to 30 percent more on their annual condominium quota, if the condominium or home-owners’ association sees fit.
Additionally, part of the revised law states that existing AL owners must now 'acquire mandatory multi-risk insurance.'
The Portugal News stated in a recent article that "Hostels are also addressed in the revised legislation; anyone wanting to create a hostel in a horizontal property regime (where some of the houses are for permanent residence), must ask the condominium for prior authorisation. Condominiums have also been given leverage to oppose or even ask for AL licences to be revoked, if the property in question is in an apartment block, but according to a legal expert’s analysis of the new law, this would happen only if there is a repeated practice of acts that preclude or disturb the normal enjoyment of the building by the condominium owners, and which are reported to the local council."
Lastly, all AL licensed properties (existing and new) are now obliged to have an information book in four languages – Portuguese, English and at least two other foreign languages.
Owners failing to comply with the AL law in general – for example, accommodating more guests than legally allowed, or unsatisfactory hygiene or safety standards – now face higher fines too, previously €2,500 but now €4,000 in the case of individual owners, and from €25,000 to €40,000 if the property is owned by a company.
Essentially, councils have now been given more power to ensure all AL licensed properties comply with the regime. They can order the temporary suspension of licences should the functioning of the property be considered a matter of public health.
To register a property as AL you should now contact your local council (câmara) directly, rather than the national tourism board (Turismo de Portugal), as was the previous process. In the case of privately owned properties the councils have 10 days to decide if they will accept the AL registration or not, or 20 days if the request is for a hostel.
If you are considering buying an Algarve property to provide you with rental income, take a look at our series, 'Buying Investment Property In The Algarve' for information on costs, advantages and general advice.
Property Specialists Algarve
Telephone +351 912 488 155
Telephone +351 914 237 firstname.lastname@example.org
Praca do Poder Local Lote 7, CV C, Lagos 8600-524, Algarve, Portugal