Tourism in Portugal – particularly accommodation – has been and predictably will be one of the most important economic activities.
Since 2008, Portugal has a legislation that allows a quick and efficient licensing of houses for tourism, which is a very practical solution for anyone looking to buy a house in Portugal.
The decree-law n. 39/2008 considers “houses, apartments and guest houses with a property use permit and providing temporary remunerated accommodation services” as “local accommodation” (vacation rental), which has formed, in the last decades, the basis of creation for small businesses of tourist accommodation.
In fiscal terms, the exploitation of “local accommodation” (vacation rental) is a business whose revenues are taxed together with all other commercial, industrial and agricultural income. “Local accommodation” (vacation rental) is subject to VAT and IRS or IRC (category B), according to the characteristics of the taxpayer (legal or natural person).
The operator of “local accommodation” (vacation rental) should pay VAT at the rate of 6% (List I attached to the CIVA n. 2.17 – accomodation guest house type) for his provided services.
It is possible, however, to deduct the VAT on the purchase of goods and services necessary for the activity, including acquisitions for construction, reconstruction or repair of the property in question.
The conversion of newly built properties into tourist accommodation, is certainly another viable approach for the construction sector in Portugal.
Simultaneously, this conversion will increase and diversify the supply of tourist accommodation.
The investor interested in buying property in Portugal should consider this solution as a promising application of his capital.