Are you renting your property in Madeira to tourists without a licence?

FOLLOW THESE 13 STEPS … AND SAVE MONEY !

If you or your agent rent out your property to tourists for temporary or short term accommodation
in exchange for money, then you need a licence called “alojamento local”.

The property can be a villa, house, quinta, private family home, an apartment or room to let – whatever the case, it must be fully furnished, equipped and ready for the client’s stay. This may include other services like dining, cleaning, reception, etc… being the former points obligatory (fully furnished, equipped and ready), and the latter optional. All this is equally required for occupations inferior to 30 days.
1. How to register a property for tourist use in Madeira:

The accommodation establishment first needs to be registered in the local municipality in which it is located, for example: Funchal, Calheta, S.Vicente, Machico, Camara de Lobos etc.

Registration can be done online via a site called Portal do Cidadão: https://goo.gl/RWZVZg

The site is available in Portuguese by default, however there are also Spanish and English versions of the site too.

Once your in the site, select your district/region, by clicking on the map of Madeira on the right hand side, and then select the respective municipal town hall in which your property is situated. In order to do that click on the arrow on the right hand side below the map, and a dropdown menu will unfold where you will find all of the districts of Madeira; choose the one in which your property is located and the page will reload.

Once it has reloaded, click on “Print version” (located on the top left hand side of maps) once you have done that a link will come up in which there is information on how to register your property.
2. Property information needed by the local Authorities in Madeira:

1. A valid utilisation licence of the property in Madeira.
2. Identification of the registered owner or his agent, private identity or company’s fiscal identification number.
3. The owner’s address or his/hers representative agent in Madeira.
4. The establishment’s name e.g. “Quinta Madeira”.
5. Capacity of the establishment e.g. number of rooms, beds, guests.
6. Opening date to the public.
7. In case of emergency you need a local person’s, contact name, address and telephone number in Madeira.
3. What documents are needed:

1. If the responsible person is a singular person, a photocopy of his/hers identification is needed. In the case of a company you need the comercial registration code (código de acesso à certidão permanente).
2. A declaration must be signed by the responsible person or company´s representative agent of the property in Madeira stating the adherence to all the legal requirements and latest regulations needed by law to use as the property as (alojamento local business).
3. If the applicant is the represented owner, a copy of the caderneta predial of the property is needed.
4. If the applicant is not the registed owner, of the property but is renting the property, he/she needs a copy of the lease agreement.
5. A declaration of the initiation or alteration of the activity of exploration of the property holder to exercise the provision of activity of accommodation services.

4. What are the general prerequisites of the property in Madeira to function as alojamento local:

1. Be integrated in a well maintained building.
2. Be connected to a good and reliable water supply connection.
3. Be connected to the public sewage system or have a septic tank.
4. Have good water supply of both cold and hot water.
5. Have good cleaning and hygienic standards.
6. Have good fire protection security and comply with all fire protection requirements.
5. What is needed in each unit of alojamento local:

1. Have at least one window for ventilation.
2. Be adequately furnished and equipped.
3. Have an exterior light protection system.
4. Have doors with a security system.
5. One complete bathroom is needed for every 3 bedrooms.
6. The sanitary installation system must be equipped with safety system that ensures privacy.
7. Guests must have information about the operation of the establishment.

6. What is required if the accommodation capacity is equal or inferior to 10 people?

1. Accessible fire extinguishers or blankets in adequate quantity in relation to the number of housing units.
2. Emergency First Aid equipment.
3. Instruction Manuals of all electrical items.
4. Local/national emergency telephone numbers (112)

7. How do you advertise your property in Madeira as alojamento local?

1. All publicity, comercial documentation and merchandising must have a name and logo as well as a registration number.
2. A fixed sign on the entrance of the property in Madeira is obligatory.

8. What inspection of the property in Madeira are considered normal?

1. The local camara (municipality) will inspect the premises within 30 (thirty) days of the lodging of the documentation and anytime thereafter.
2. The local camara (municipality) will exchange information with the tax office and A.S.A.E. The initial information is also sent to Madeira Tourism and thereafter every 6 months..

9. What if you do not comply with all the legal requirements?

1. Registration is cancelled with immediate effect and fines may be imposed.

10. What are the Fiscal obligations in Madeira and when are declarations sent to the Finance Department ?

1. As Alojamento local is a service provider, it is taxed in Category B of IRS. Therefore, prior to the first registration via the Portal do Cidadão, the owner or his agent representative must initiate his activity in the Finance Department of Madeira
2. A declaration of “Inicio de Actividade” (start up of business) is obligatory; OR if the owner or his agent is already registered, then a declaration called “CAE de actividade” in this case “05521 alojamento mobiliado para turismo or 55204 “outros locais de alojamento de curta duração”.

11. Is IVA obligatory in Alojamento Local?

1. Up to 10 000Euros per annum is free of IVA.
2. More than 10 000Euros per annum, 6% IVA is charged.

12. How is IRS calculated on your property in Madeira ?

200 000Euros per annum falls under the simplified tax scheme, whereby. the taxable value is 15% on which IRS will be applicable. These revenues are lumped with other remuneration in this category which the tax payer may receive for example, employment.

13. How to submit receipts on your property in Madeira?

An electronic receipt is obligatory to the client specifying name and address of the client. If the client is Portuguese, you will need to specify his NIF number too.
If you are planning on buying a property in Madeira for your own use and renting out partially to tourism, now is the time to buy in Madeira. The tourism industry is currently booming and revenues on the rise.
There is an oversupply in the luxury end of the property market in Madeira with very few buyers.
If you own a luxury project in Madeira with or without a licence for “alojamento local”, or your property has been on the market in Madeira for a long time and nothing has happened, I would love to be able to meet with you.

About Author: Tony Nobrega

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