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A New “Tax” for the Local Accommodation

Dec 19, 2023

Recently, the government has implemented measures to limit the number of houses exclusively dedicated to short-term rentals, making more local lodging establishments available for residential purposes. These measures are included in the Mais Habitação package, and also in Law No. 56/2023 which was published on the 6th of October.

Owners of local accommodation establishments will have an extraordinary contribution to make, which operates like an extraordinary tax. This contribution applies to all local accommodation units with the appropriate licence and paperwork. However, there are some exceptions to this general measure for local accommodation establishments. The contribution is only applicable to apartments, and exceptions include:

Local accommodations located in territories in the interior of Portugal;
Local accommodations that are used as permanent accommodation. In this case, the proprietors must prove that the short-term accommodation does not exceed 120 days per year.
Residential houses that are not autonomous parts or fractions suitable for independent use.

The official name for this new contribution to local accommodation is CEAL, which stands for “Contribuição Extraordinária para o Alojamento Local”, or a special contribution to local accommodation in English. This new tax has a value of 15% and depends on various factors, such as the area of the apartment, the income generated from the local lodging business, the evolution of the leases, and the urban pressure in the location of the apartment. This contribution needs to be paid until the 25th of June of the next year, in this case, until 2024.

We expect that the tax authorities will clarify some practical aspects deriving from the implementation of this new contribution and will comment as soon as they are published.

If you need help with this matter or any other related issue, please don't hesitate to ask for our assistance. We will be delighted to assist you.

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Benefits of Personal Income Tax for Young Professionals

by Diogo Pedro • 07 May, 2024

Over the past four years, young workers who earned their first income as employees or self-employed individuals have been eligible for a tax benefit in their personal income tax, known as 'IRS Jovem”. This benefit is intended to offer young workers the possibility of minimising their tax obligations, allowing for a higher amount of disposable income. To enjoy this benefit, taxpayers are required to comply with the following requirements: Have a complete course of level 4 or higher studies on the National Qualifications Framework (high school level acquired through double certification and aimed at pursuing higher education such as a bachelor’s degree, a master’s degree, or a PhD). Age between 18 and 26 years old. Considered independent, i.e., no longer included in the parent’s household for tax purposes. The specified age limit includes individuals up to 26 years old, inclusive. However, this limit is extended to 30 years old for taxpayers who have completed a degree at level 8 of the National Qualifications Framework (PhD). In 2024, this tax benefit has been improved, with increased tax exemption rates and an expanded range of applications over time. In this sense, upon completing the course of studies required, the individual may qualify for an exemption from personal income taxes for a duration of 5 years, as explained in the following details: 100% of the income in the first year with a cap of 40 times the Social Support Index – “IAS” value (€20.370,40). 75% of the income in the second year with a cap of 30 times the IAS value (€15.277,80). 50% of the income in the third and fourth year with a cap of 20 times the IAS value (€10.185,20). 25% of the income in the fifth year with a cap of 10 times the IAS value (5€.092,60). Moreover, the exemption can only be used once by the same taxpayer and should be requested when preparing and filing the personal income tax return. It is also important to acknowledge that this benefit has implications for withholding tax, allowing adjustments to the value subject to withholding tax. However, be aware that, while the withholding tax rate applied corresponds to the total amount of income earned, it is only applicable to the portion that is not exempt. If you have any questions or need assistance with this or related matters, feel free to reach out . We would be delighted to help you.

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