Portuguese Government Announces Positive Changes to Holiday Rental Laws, Supporting Real Estate Sector
The Portuguese government has approved significant changes to the rules governing local accommodation (AL), bringing relief to property owners and positively impacting the real estate market. These amendments, which reverse several restrictive measures implemented by the previous administration, aim to enhance the attractiveness of properties suitable for holiday rentals for both buyers and sellers.
In a recent announcement, António Leitão Amaro, the Minister of the Presidency, highlighted the government's commitment to addressing the concerns of the real estate sector. Speaking after a Council of Ministers meeting in Lisbon, Leitão Amaro emphasized that the new changes "correct some mistakes" made under the previous legislation, which had been a source of contention within the industry.
One of the most welcomed revisions is reinstating the transmission of existing rental licenses. The cancellation of this transmission by the previous government was a rule that had definitely limited the flexibility for property owners in case of death, inheritance, divorce or choice to sell their property. Once the new law is published, AL-licenses will be transmittable again from one owner to the other, which is great for both property owners and buyers in the market.
Another welcome revision under the new law, is that AL-licenses will no longer expire after five years. This change ensures greater stability and security for property investments.
Additionally, the government will introduce a decentralization approach, empowering municipalities to make decisions regarding local accommodation rules in high-pressure areas. This move allows for more tailored regulations that reflect the unique needs of different regions, fostering a balanced and sustainable growth of the holiday rental market. As currently no new AL-license can be applied for for any property in a “propriedade horizontal” regime, decentralization of this approach means that local municipalities can decide whether they make the request of new AL-licenses possible again.*
Leitão Amaro expressed confidence that these revisions would be approved swiftly, stating that the final law could be in place "within weeks." This rapid implementation is expected to provide immediate relief to the sector, which had been under strain from the previous regulations.
The current government's proactive stance, including the recently announced correction of the extraordinary contribution and the coefficient of obsolescence for Municipal Property Tax calculations, signals a more favorable environment for the real estate market. These changes are expected to boost confidence among investors and contribute to the overall health of the sector.
In summary, the government's latest adjustments to the holiday rental laws are a positive step towards supporting the real estate market in Portugal, offering an attractive landscape for investors but mostly much-needed stability and flexibility for property owners and buyers.
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