In November, 2014 new rules came into force in Portugal for the ‘local lettings’ sector - the rental of apartments and villas on a short term basis to tourists.
By the end of July this year, inspectors from ASAE claimed to have checked out 293 owners and found that 31% in some way did not comply with the rules.
The main breaches have been by those advertising local accommodation establishments that are not registered or that have outdated records.
Others have failed to display the Alojamento Local sign outside the building or have not notified the council or the tax office that the property is being let.
The introduction of new rules involved registering the activity with Finanças and with the Portuguese tourist board.
Since last November to August 4th there has been a total of 18,128 rental businesses registered which has pleased the Minister for the Economy, Pires de Lima, "in just over eight months, local accommodation registrations have tripled the previous total of 5,865 built up over the past 8 years.”
The Algarve is the district with the most registrations - 55% of the total, followed by Lisbon, with 20%, and Oporto, with 7%.
The number of Algarve properties complying is a small percentage, around 6%, of the 140,000 rental properties estimated by the government to be on offer for short term lets.
The Ministry of the Economy added that "these figures show that the most effective way to combat informality and promote the creation of new businesses is simultaneously lowering barriers to formalisation and strengthening oversight mechanisms for the Tax Authority and ASAE."
If there are only a handful of inspections a year, the Economy Minister’s reliance on fear as a weapon to drive people to comply will not be enough.
However this scheme is dressed up, and whatever the positive spin from the ministry, it is not going well due to a rejection of the rules by the vast majority of owners who will carry on informally renting out their properties until caught out.
As far as 'strengthening oversight mechanisms,' if only a few inspections are being carried out, the chances of getting caught out are close to zero and the cost and hassle of compliance for many is not worth the effort.
The 'lowering barriers to formalisation' for many foreign owners has a hollow ring as many say it is impossible for them to comply.
There is Nalle of course, an organisation set up to help those who wish to become compliant.
and afpop of course
http://www.afpop.com/uk/index.php
