08/05/2024
Dear house owners and house managers,
New ‘tourist tax’ that some municipalities are adopting in the Algarve in relation to AL touristic accommodation.
So far, the following areas have adopted it Vila Real de Santo António, Olhão, Faro, Portimão, and Lagoa. In the case of Portimao it only applies to ‘new reservations’ taken after mid-March.
Lagoa has rushed this law though on 13 April, with it to start for all arrivals from 1st of May and held a ‘firefighting’ meeting at the town hall last week which our accountant and Stella attended.
The Tax will need to be charged to the clients of all holders of a local accommodation licence (AL). Owners or managers/accountants must register on the Tourist Tax App via the Municipality of Lagoa website no later than May 12th, 2024, to avoid penalties.
The website registration once completed will allow the owner or manager/accountant, to fulfil the fiscal/legal obligations regarding the charge of this Tourist Tax.
Below you will find some general information about the Tourist Tax:
Tax Rates and Seasons:
The tax is charged per person/night in all tourist resorts and local accommodation establishments (AL), up to a maximum of 7 consecutive nights per person/stay.
Applicability:
The tax is levied on guests aged 13 or over and is applied throughout the year in accordance with the stipulated amounts:
€1 per overnight stay per person up to a maximum of 7 consecutive nights per person, between November 1st and March 31st - low season.
€2 per night and per person up to a maximum of 7 consecutive nights stay/person, between April 1st and October 31st - high season.
Collection and Reporting:
Each accommodation establishment must collect the Municipal Tourist Tax from the guests on their arrival and submit a report declaring the amounts collected and pay the tax collected to the respective city hall in the following month.
Regardless of having bookings or not, each establishment will be obliged to file a monthly report, even if it is a nil report. The responsibility of reporting and making the payments lies with the holder(s) of the AL license e.g. the villa owner.
Responsibility and Penalties:
Non-compliance will of course incur fines.
The Lagoa municipality has provided more detailed information on how to implement this tax, which can be found at https://www.cm-lagoa.pt. Other municipalities in the Algarve that charge the Tourist Tax are: Vila Real de Santo António, Olhão, Faro apparently quietly introduced this last year ! Portimao has already said it is only for new bookings taken after mid-March not existing ones and Albufeira is preparing to start the tourist tax charge towards the end of May.
Typically, this legislation has been rushed though, without the registration website in proper working order and no consideration or notice given to anyone to enable anyone to implement a system.
Unfortunately, after reviewing all the information available, the only way the tax can be collected is in resort. We propose that all AL owners that need to collect this tax ask their managers and maids to leave an envelope for each client for their arrival when the villa is prepared with a demand for the tax in cash that can be collected at the end of their stay. A notice explaining the tax to the clients should be left (we believe Lagoa council are preparing something to leave for clients). Clients will need to be warned in a document left for them that failure to pay the tax will result in their passport details, name and addresses being passed on to the local authority for non-payment - which is within the reporting system of the Tourist Tax App.
From an administration point of view, it’s probably best that whoever handles the AL license owner’s SEF reporting should handle the tourist tax reporting, so this could be the manager or accountant depending on your set up. To give an example below here is how our accountant intends to process this - he looks after over 300 AL properties in Lagoa. This is a copy and paste he sent to all his clients after the town hall meeting.
Touristic Tax
13 of April was approved the touristic tax by Lagoa town hall, but only today 30/4/2024, was clarified, by them, more details about the terms, conditions, and proceeds:
1- Who need to pay?
All guests with age above 13 years, included.
2 - How much to pay?
High season from 1st of April to 31 of October 2€ per person per night / low season from 1st of November to 31 of March 1€ per person per night.
3 - How do the guests pay; how can I collect and when?
Normally you should collect at the check-in time or arrange another payment solution.
4 - Can it be collected by the rental sites, like Airbnb and others?
No, it’s not possible, but you should put an information at that rental sites about the tourist tax charged, so the guest know in advance about this payment and can provide the payment to you.
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5 - Is the tourist tax considered rental income for the AL, subject to personal taxation?
No, it’s not, you collect the money, keep the money, and later pay it to local town hall, it’s not your money.
6 - Is there a limit of nights to charge to the guest?
Yes, 7 nights, example a booking of 8 or more nights pay only 7 nights per person, according to the season.
7 - When will start to charge the touristic tax?
The confirmed date is the 1st of May to start, for all check ins from that date on, Irrespective of when the booking confirmed.
8 - If a guest refuses to pay?
You must notify through the town hall app of non-payment by the guest and wait for the town hall on how they will proceed, or you make the payment yourself.
9 - When do I need to give the booking report to the local town hall, for touristic tax payment?
It’s a monthly report and always done up to the last day of the follow month from the check in day, example check in in May, report will be until 30/6/2024.
10 - I supplied the report but when do I have to pay the tourist tax to the town hall?
The report will create a reference payment for the tourist tax, and you can pay it up to 30 days from that day, by the bank/ home banking or at the local town hall services.
