Local Accommodation sector faces “massive tax increases”

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Portugal’s State Budget 2020 will levy a massive taxation increase on revenues from ‘Local Accommodation’ — the private holiday lettings sector that the Government has been keen to encourage over the past five years.

The measure focused on properties in historic centres and areas where the market has become saturated, and essentially increases tax by “around 50%” says ALEP, the association for Local Accommodation in Portugal”. ALEP president Eduardo Miranda condemns the move for being “disproportionate and very penalising”. This is the regime in three years, he stressed, and with this new measure, this means taxes on AL have increased by a whopping 300%. The budget also opens up the possibility for AL proprietors to opt out of the penalised regime — as long as they then put their properties on the (less lucrative) long-term rentals market. Another organisation which also represents guest house owners, the AHRESP slammed the Government’s proposed measures as “totally disproportionate” and accused the Government of “unfairness” for all those B&B guest house owners who had done so much to help regenerate inner cities.“This proposal for the State Budget of 2020 strips confidence in Portugal’s national tourism activity, one again picking on Local Accommodation as an activity, proposing new levels of taxes on the simplified regime for IRS and IRC from 0.35 to 0.50, specifically for those establishments in city centre areas of contention” (in specific historic neighbourhoods where locals have complained that local guest house tourism is destroying the traditional character of these neighbourhoods and driving away the local communities) states the. AHRESP.“This increase in taxes is totally disproportionate, discretionary and penalising” for an economic activity of the greatest relevance for economic recovery.”The association says that the proposed tax hikes “will not maintain tax stability for the tourist sector which has had such an important role in the economic recovery of the country.”The association added that the measure was of the “utmost unfairness” for all those who had invested in and refurbished empty and run down properties, thereby contributing towards urban regeneration.”