(article updated on October 30, 2024)
Renting your property for a vacation rental in Portugal can be a profitable activity, but it is essential to understand all the steps necessary to start this endeavor. In this guide, we follow the process of opening an activity with the Portuguese Tax Authority, registering with Social Security, and obtaining a vacation rental license.
Index
Request Vacation Rental License
Open Activity with the Portuguese Tax Authority
To rent your property, you must start by communicating with the Portuguese Tax Authority the start of the activity. You must have a Portuguese NIF (Tax Identification Number) and an updated tax address to do this. There are no costs associated with this process.
Some information you will have to fill in the declaration:
- Activity Start Date
- The Property Address (if different from your tax address)
- Type of income: Category B - Business and Professional Income;
- Choose from one of the following CAEs:
- 55201 - Furnished accommodation for tourists;
- 55204 - Other short-term accommodation places;
- Estimated revenue value by the end of the year;
- Activate intra-community acquisitions of services.
Organized accounting will be mandatory if the expected annual revenue exceeds 200 000€ gross (before deductions). This regime requires hiring an official accountant to validate and review all your activities. If the forecast is lower, you can opt for the simplified regime.
Note: Tax information from this point onwards will be exemplified considering the simplified taxation regime.
The activation of intra-community acquisitions corresponds to the VAT Information Exchange System (VIES), and it must be communicated to the online booking platforms (Airbnb, Booking, Vrbo, etc.) that you have activated VIES. The invoices with the commission thereof come without VAT.
Register for Vacation Rental at the Public Services Portal or City Hall
The request is made online through the Public Services Portal. To register online, you must have your Citizen Card and the corresponding card reader or Digital Mobile Key, as well as a digital certificate from a lawyer, solicitor, notary, or a European Digital Certificate to carry out authentication. If you do not have these options, you must complete your registration at the city hall.
The request will only be accepted if the competent city hall does not oppose it within 60 days. Opposition may occur due to errors in the application, lack of appropriate building permits, or violation of established restrictions. These restrictions may be associated with containment areas defined by the city hall or a temporary ban on new registrations.
Containment zones or temporary registration bans occur where the ratio of vacation rentals to available housing exceeds 25% and 10% to 20%, respectively. Before applying for a rental license, it is essential to check the situation in the parish where the property is located.
The documents required to register for vacation rental are:
- Identification document of the property holder (in the case of an individual) or provision of the access code to the permanent certificate of commercial registration (for legal entities);
- Term of responsibility, signed by the property owner, guaranteeing that the building or autonomous unit is suitable for use as vacation rental, following current legal and regulatory standards;
- Provide the property registration number if you are the owner.
- Lease contract or other document that legitimizes the property holder to carry out the activity;
- Declaration submitted to the Tax Authority regarding the start or change of activity of the owner of the exploration (the activity must be authorized to provide accommodation services);
- In the case of a hostel, minutes of the condominium meeting containing authorization for its installation;
- The number of the building's use authorization title, if built after 1951.
Each order receives a registration number for the vacation rental establishment, which authorizes its opening to the public.
The registration number is mandatory for establishment advertising, commercial documentation, and merchandising. You must also disclose the registration number on the various online booking platforms (Airbnb, Booking, Vrbo, etc.).
Inspection and Compliance with Mandatory and Safety Requirements
After requesting a license, the City Hall has 30 days (90 days if the vacation rental is in a containment area) to conduct a first inspection of the property. The City Hall will confirm that it complies with all legal procedures and safety standards in this first inspection of your vacation rental.
Therefore, your property must:
- Present adequate conditions for the conservation and operation of facilities and equipment;
- Be connected to the public water supply network or have a private system with a properly controlled source;
- Be connected to the public sewage network or equipped with septic tanks sized according to the maximum capacity of the establishment;
- Have running water, both hot and cold;
- Have windows or balconies with direct access to the outside, ensuring good ventilation and aeration conditions;
- Be equipped with appropriate furniture, utensils, and equipment;
- Have a system that allows you to block the entry of external light;
- Have doors with a security system that ensures guest privacy;
- Sanitary facilities must have a security system that guarantees privacy.
You must also provide an information book about the operation and internal rules, which must include the following:
- Rules for collection and separation of urban waste;
- Instructions for using household appliances;
- Noise standards and precautions to avoid disturbances that cause nuisance, affecting the tranquility and rest of the neighborhood;
- The telephone contact of the person responsible for operating the establishment.
This information book must be available in Portuguese, English, and at least two other foreign languages.
Host Wise sells an information book that is fully customizable for your unit.
Security requirements
For vacation rentals with a capacity equal to or less than 10 users, it is mandatory
- Have a fire extinguisher and fire blanket accessible to users;
- Provide a first aid kit available to users;
- Display the national emergency number (112) in a visible location for users.
You can purchase the Vacation Rental kit with all these items in our Online Store.
Other Requirements
- Provide a complaints book (which can be purchased at Imprensa Nacional Casa da Moeda) with a cover page, sold together with each book, posted in the accommodation, in a visible place, filled with the following data:
- Competent Entity: ASAE
- Address: Rua Rodrigo da Fonseca nº73, 1269-274 Lisboa
- Have multi-risk civil liability insurance that protects assets and covers claims related to tourist activity, including fire risks and property and non-property damage caused to guests and third parties resulting from accommodation services.
Identification Plate
Except for Vacation Rental registrations in the Housing modality, everyone must affix the approved identification plate to the establishment's main door.
Board Features:
- Transparent crystal acrylic material, extruded and polished, 10mm thick
- Dimension: 200mm x 200mm;
- Arial font, dark blue (pantone280);
- Application at a distance of 50mm from the wall, using stainless steel screws in each center and respective stainless steel covers for placement on their heads
If the establishment's entrance is inside a building, you can opt for an identical model sign but smaller in size—100mmx10mm.
Host Wise has AL cards for sale in its online store, which is under regulations.
Inspection of Other Entities
Vacation Rental establishments can also be visited by the Food and Economic Security Authority (ASAE) and the competent City Council regarding inspection actions to verify compliance with the law (Decree-Law nº 128/2014, 29 August). Turismo de Portugal I.P. can also inspect your property at the request of ASAE to verify the update of the list of vacation rental establishments for registration on online booking platforms.
Regular Obligations
Municipal Tourist Tax
The Municipal Tourist Tax (TMT) is a contribution established to mitigate the impact caused by the expansion of the tourism sector. Hotel establishments and local accommodation units must charge this fee to their guests.
It is essential to highlight that TMT is exempt from VAT, and its collection is not optional—all Vacation Rental establishments must implement it mandatorily. The accommodation owner or manager must be aware of the applicable values, charging conditions, and possible exemptions.
Some platforms, through partnerships with local authorities, already charge within their website, as is the case with Airbnb and Porto's tourist tax. Each municipality makes this information available on its website, where it can be consulted.
Host Wise collects tourist taxes on all vacation rentals and properties.
Communication to UCFE (former communication to SEF)
It is mandatory for all establishments that provide accommodation services for remuneration to foreign citizens to communicate their stay.
With the extinction of the Serviço de Estrangeiros e Fronteiras (SEF), communication is made to the Unidade de Coordenação de Fronteiras e Estrangeiros (UCFE), under the coordination of the Secretário-Geral dos Serviços de Segurança Interna (SSI). Despite this change in management, the procedure remains the same.
The deadline for communication is three working days (after arrival and departure). You can do this through the hosting bulletin on the SIBA Portal (Hosting Bulletin Information System).
To register your guests with SIBA, you need to create an account on the portal. You must fill out the form with your information and wait 48 hours to receive the activation key associated with your establishment's code by email.
Data required for each guest includes:
- Full name
- Date of birth
- Nationality
- Passport number or identification document
- Country of origin
- Vacation rental arrival and departure dates
The portal has a guide (PDF file) with all the steps for registering and reporting all stays.
Host Wise manages all communication with various government agencies.
Taxes and Fiscal Obligations
Issuance of Receipts
As previously stated, we will assume that the simplified regime covers it; that is, the individual entrepreneur takes care of his accounting independently. Therefore, you must:
- Issue an invoice for each reservation within 5 days of receiving the amount or within 5 days of check-in;
- The invoice must be issued on the Finance Portal or sent the SAF-T file by the 20th of each month
IRS (Income Tax)
As a vacation rental owner, you must record on your income tax return the amounts you received and for which you issued a receipt.
Under the simplified regime, the tax is registered as category B, and your vacation rental income will be taxed at 35%. The remaining 65% are not subject to taxation as they are considered operating costs.
IVA (Value Added Tax)
Exemption
Regarding IVA, it is possible to opt for the IVA exemption regime (article 53 of the CIVA) if you meet all of the following conditions:
- Carry out your activity as a self-employed person under the Simplified Regime;
- Annual turnover of up to €14,500 (in 2025 it will be €15,000);
- Absence of import, export operations, or related activities;
- Absence of transfer of goods or provision of services, provided for in Annex E of the IVA Code.
In this case, it does not charge its customers IVA, does not hand it over to the State, and does not deduct VAT from its expenses.
Payment
In the event of paying IVA, you must:
- Invoice your hosting services with the corresponding IVA;
- Submit the periodic IVA declaration through the Tax Authority Portal, per the legal deadlines.
After submitting the declaration, the payment document is generated on the Tax Authority Portal. You have 5 days to pay.
If you have to pay IVA, you can also deduct the tax paid on vacation rental expenses, such as the 23% spent on furniture, household items, detergents, etc. In other words, pay IVA at 6% but deduct at 23%.
By considering these alternative taxation options and understanding the relevant IVA exemptions and rates, you can make informed decisions that will help you maximize the profitability of your vacation rental business in Portugal.
Alternative taxation options
There is also an option, created with the State Budget for 2017, to tax income from local accommodation through the rules of Category F (rentals). With this option, you can deduct expenses (condominium fees, renovations, IMI, water, electricity, and telecommunications bills) and apply a rate of 28% on the amounts invoiced (after deducting expenses). Alternatively, you may include vacation rental income if your tax rate is less than 28%. Keep in mind that this option must be made annually.
Social Security
When you start providing local hosting services, you are automatically enrolled in Social Security.
If your activity is open exclusively for seasonal rentals, category B income (business and professional income) is exempt from paying Social Security.
On the other hand, if you earn income from category B work other than vacation rental, you lose the exemption, according to the Contributory Regimes Code (the exemption is maintained only for the first year, as already provided).
If you are not exempt, you must submit quarterly and annual returns showing the total income for the corresponding period.
Social Security contributions must be paid by the 20th of each month. In the Social Security Portal, in the Current Account> Current Position menu, you can check the amount of contributions to be paid and the respective deadline.
Quarterly and Annual Statements
The quarterly statement will determine the amount to be paid monthly in the following months, the calculation being based on the income obtained.
After sending the declaration, you will receive a message on the Social Security Portal informingyou of the calculation basis defined for the coming months and the amount of the contribution to be paid.
By the end of January, you must file your annual income tax return for the previous year. This obligation applies to all self-employed workers who submitted at least one quarterly declaration in the previous year.
IMI (Urban Property and Territorial Tax)
The value of the IMI rate is established individually by each municipality, respecting the limits defined at the governmental level. The State Budget for 2023 introduced an increase in this tax in two specific situations:
Vacation Rentals
Possibility of increasing the rate by up to 100%
Properties in Urban Pressure Zones
Increase of up to 25% for properties that:
Not rented for housing
Not used as permanent housing
Additional note: If companies or tax-equivalent entities own the properties, the increase may be increased by 50%.
We know how difficult it is to navigate through so many taxes and fees, which is why Host Wise supports all its owners in tax and accounting matters.
If you need a partner to manage your vacation rental, contact us. We are happy to help you maximize your investment.
