The taxman is inspecting those involved in renting out their properties and a squad of newly trained staff is focusing both on the market in short-term lets to holidaymakers and is checking that income from long-term lettings are properly being accounted for and taxed.
The taxman is taking the obvious route and is starting by collecting information "from newspaper advertisements and ads on the Internet” but also from water and electricity suppliers contracts to see who has more than one property.
Webites such as HomeAway and AirBnB are now being scanned by trained tax officials to identify those properties in Portugal that are for rent. Simple checks can reveal ownership and the owner's tax payment records.
Fines and retrospective assessments both are likely where apartments and villas have been let and no records have been submitted to the Portuguese tax authorities.
The taxman is now ‘moving from words to deeds’ and undercover tax inspectors are posing as potential renters of properties to see what is on offer and whether owners are trying to stay below the tax radar.
The tax inspectors are keen now to for those longer-term rental contracts which should be registered at Finanças but somehow owners never got around to it.
The Alojamento Local registration system for holiday lets leaves many Portuguese property owners who let a room on a casual basis to top up their pension, unable to comply without disproportionate expense and hence are operating illegally.
The availability of many types of casual lets, which suit certain market sectors, is contracting rapidly to the detriment of the Algarve as a flexible, responsive and inclusive holiday destination.
