Holiday rental scams - be warned

Paul Rees 09 June 2017

spanishluxuryhome The Portuguese Consumer Protection Association (DECO) has issued a warning to anyone renting a holiday home in Portugal, beware of crime, especially on the Internet.

"Every year in the summer, we receive dozens of complaints about holiday home rental scams," said Ingride Pereira, a lawyer for Deco's consumer support office.

According to Pereira, most of the complaints received by Deco are related to the fact that the consumer pay to rent a house that does not exist or is nothing like it appeared in the online listing.

Deco offers some advice to anyone who is thinking of renting a vacation home:

- mistrust ads on social networks or websites that are not well known

- distrust very low prices

- always do a search on several websites: "sometimes the same house appears on various platforms with various prices", explains the lawyer

- find out if it is a private individual or a company that is renting the house: "if there is a problem the company has more obligations"

- in case of doubt, ask the owner for details about the property, such as the land registration certificate

- before making any payment, look on the internet to see if there are any testimonies related to that property

- where possible, contact the condominium to make sure that the person you spoke or contacted is the owner of the property

Another safety guard is to check on the Turismo de Portugal website to check that the property has an Alojamento Local licence which shows the government and local council have approved the property for rental purposes.*

Owners that do not have an Alojamento Local licence may be less likely to be helpful when problems arise and the fact the property was not authorised for letting will stand neither party in good stead should matters need judicial intervention. Renters also will receive a proper receipt for their expenditure, seldom the case for unlicensed rentals.

Check the insurance category applicable to the property as owners should at minimum have cover for accidents in their properties. What about theft of valuables, are you covered?

Another scam is for renters to be asked to transfer a large deposit of full payment to a bank account outside the country and/or in a different name to that of the property owner.

Criminals can hack into email accounts, assume the personality of the legitimate owner and ask for money to be transferred to accounts outside of Portugal.

If potential renters are asked to transfer payments to other countries, they should ask themselves - is this a scam? If it the legitimate owner insisting on an overseas transfer, why should renters get involved in possible tax evasion?

There is good safety advice for renters when in Portugal on the Safe Communities Portugal website

For property owners looking to go legitimate, contact the National Association of Local Lodging Establishments at www.nalle.pt and ask afpop for information.

__________

* (and see readers comments) Obviously with only a 20% registration rate to the AL scheme, the government is allowing the vast majority to trade illegally, thus penalising those who follow the often complex laws.

If the market was limited to 20% of the available rental property stock, tourism would drop, tourism spending would sharply decline and the government then might actually introduce a workable scheme, not the current botch that successive tourism minister and Secretaries of State try and persuade us is 'fit for purpose'

Comments

0 #11 Ed 2017-06-11 17:05

Quoting Jeff Harris:

No one has yet mentioned last weeks news that the MP chairing the most recent Portuguese AL law simplification re-write was well known to be representing the hoteliers - who want to minimise competition - as her family were hoteliers themselves. Not alone, as no doubt no one pushing open access for other EU nationals to the Portuguese tourism sector would have been allowed into the room. But it just seems so hopeless that no one at these meetings flagged this up. Insisting on reporting irregularities as is apparently now a 'civic duty'.

But then any MP doing so - their party loyalty irrelevant - would be de-listed from the next election for being 'of suspect loyalty'. And any civil servant at the meetings would soon be relocated well clear of Government Committees. Away from the perks.

See

http://algarvedailynews.com/news/11819-socialist-hotelier-mp-instrumental-in-drafting-new-alojamento-local-rules-to-restrict-apartment-owners

0 #10 Jeff Harris 2017-06-11 16:56

No one has yet mentioned last weeks news that the MP chairing the most recent Portuguese AL law simplification re-write was well known to be representing the hoteliers - who want to minimise competition - as her family were hoteliers themselves. Not alone, as no doubt no one pushing open access for other EU nationals to the Portuguese tourism sector would have been allowed into the room. But it just seems so hopeless that no one at these meetings flagged this up. Insisting on reporting irregularities as is apparently now a 'civic duty'.

But then any MP doing so - their party loyalty irrelevant - would be de-listed from the next election for being 'of suspect loyalty'. And any civil servant at the meetings would soon be relocated well clear of Government Committees. Away from the perks.

-1 #9 vanessa.de beer 2017-06-11 14:21

Charly, its a new law that has come in and Finances now want the passport numbers and nationality. I know all about SEF, but this is about three weeks old. My accountant is one of the best in the Algarve and she would not ask for this information if it were not required by Finances.

0 #8 Charly 2017-06-11 10:39

Answer to Vanessa de Beer: I think there is a misunderstanding: it is NOT Finanças who requires that information but SEF (immigration and border police).
In case people make the efoort to read the correct text (or law) you'll see it is not complicated and definitely not tricky at all. At least that's our experience after 16 years in the business....

0 #7 vanessa.de beer 2017-06-11 09:13

We ask people to pay into a UK bank account as most of them are British people who do not want to pay in euros and pay the exchange rate on top of a booking fee as well as the weekly rate for staying in our accommodation. Those people who are booking from the EU want to pay in euros, for the same reason, so we try to accommodate our clients. Do you know you have five days to report the payment to the finances and now you have to furnish the clients passport numbers, what are they going to do with masses and masses of passport numbers? The AL licence is a very tricky and difficult system and if it were simpler many more people would get involved and become legal.

+5 #6 Charly 2017-06-10 11:53

Would you like to know WHY foreign residents are using that system ? Very simple : as Portugal is a very "dangerous" country on behalf of Finanças people try "to protect" their money as much as possible. When your money is NOT in Porutgal, than the Portugese Finanças can hardly steal it, isn't it ? Why is that ?
1. THERE IS NO BANK SECRECY: already some 12 years ago Portugal abolished the bank secrecy giving every finance inspector the possibility to look into your bank account only based on "there might be some suspicion..." And believe me : these guys look into bank accounts as much as they can.
Easy to understand what will happen when you have let's say 20.000 € on your bank account ... the risk to see it "vanish" one day is absolutely eminent !!!!!!
There are many cases known where - without any reason at all - the bank account had been plummed.
You don't believe me ? Ask the former president of NCA who's account with 38.000 € had been plummed
without any reason. Months after Finanças sent a letter "of excuses for their mistake" to the man, but till today = 8 years later the stolen money never had been refunded !
2. THE COERCIVE SYSTEM as applicated by Finanças is nothing less than "a criminal way of steeling money". Whenever you receive "an order to pay taxes or fines" then you have to pay immediately even if it does not implicate you or if the amounts are wrong ! The rule is: "FIRST PAYING AND ONLY AFTER THAT TALKING" IN practice the result is dramatic: bye bye money !!!!!! as Finanças never repairs its mistakes

+5 #5 Charly 2017-06-10 11:17

This is apparently "an interesting issue". Let me add this: 1. making a payment on a bank account wherever that might be inside Europe is NOT illegal and 2. as the action takes place in Portugal of course the INVOICING and consequentely the accountancy + IRS has to be settled in Portugal and that is absolutely CORRECT.
However in practice I estimate that 90 % of the foreign residents involved in holiday rentings "forget" to make an invoice and forget also to make an IRS declaration in Portugal or elsewhere. The Britisch seems to be the champions in that respect, followed by the Dutch...

0 #4 John Harvey 2017-06-10 10:32

Quoting Charly:

Making an overseas money transfer IS DEFINITELY NOT A SIGN OF (POSSIBLE) TAX EVASION !!!!!!!!
Inside the EU 28 countries there is FULLY FREE MOVEMENT OF PEOPLE, GOODS AND FINANCIAL PRODUCTS. There are only "problems" in the mind of CRIMINALS and or WEARD OR DISTURBED PEOPLE. Luckily that concerns only a minority of people.
As far as the Turismo de Portugal website concerns.... don't expect too mucj hjelp as only about 25 % of all premisses are registered on that website and on the other hand in the list itself there are more than 20% mistakes made with the registration....
Conclusion: this is a splendid example "of daily Portugese shit"

Clearly not a regular reader. Ed's point about the AL register is exactly it's poor uptake. He has been a harsh critic of the register and the pathetic number that opt to follow the law. All non AL registered owners are renting illegally - that's 8 out of every 10. His point abolut rental income being paid into accounts outside the country is bang on target too - I suspect, from the exclamation marks and use of capital letters, that red wine was at play when you penned your less than helpful comments.

+1 #3 MariaF 2017-06-10 00:26

Quoting Charly:

Making an overseas money transfer IS DEFINITELY NOT A SIGN OF (POSSIBLE) TAX EVASION !!!!!!!!
Inside the EU 28 countries there is FULLY FREE MOVEMENT OF PEOPLE, GOODS AND FINANCIAL PRODUCTS. There are only "problems" in the mind of CRIMINALS and or WEARD OR DISTURBED PEOPLE. Luckily that concerns only a minority of people.
As far as the Turismo de Portugal website concerns.... don't expect too mucj hjelp as only about 25 % of all premisses are registered on that website and on the other hand in the list itself there are more than 20% mistakes made with the registration....
Conclusion: this is a splendid example "of daily Portugese shit"

I think you have misunderstood about money transfers. The news article says that if people are asked to make payments for rental properties in Portugal to accounts in other countries, especially in other names to that of the owner, this is likely not to be declared to the Tax Authority in Portugal. I guarantee this happends in many cases, I should know as I manage over 20 properties for owners and most of them only declare holiday lettings money that is paid into Portuguese accounts. The money paid into their foreign accounts is never declared.

+1 #2 PeterG 2017-06-10 00:21

Quoting Charly:

Making an overseas money transfer IS DEFINITELY NOT A SIGN OF (POSSIBLE) TAX EVASION !!!!!!!!
Inside the EU 28 countries there is FULLY FREE MOVEMENT OF PEOPLE, GOODS AND FINANCIAL PRODUCTS. There are only "problems" in the mind of CRIMINALS and or WEARD OR DISTURBED PEOPLE. Luckily that concerns only a minority of people.
As far as the Turismo de Portugal website concerns.... don't expect too mucj hjelp as only about 25 % of all premisses are registered on that website and on the other hand in the list itself there are more than 20% mistakes made with the registration....
Conclusion: this is a splendid example "of daily Portugese shit"

Nope, I think the item is right. Why would people want money transferred to other countries, in or outside the EU, if not to hide it? Rental income is taxed in Portugal wherever the owner is tax resident. It's a big game to funnel as much to accounts outside Portugal and then not to declare it locally. Thinking otherwise is naive in the extreme. Also it is illegal to let properties without an AL licence. Paying for an illegally let property is condoning illegality - Conclusion: the article is correct on both counts.

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