How it works: Temporarily Renting Out Your Property in Portugal.

Are you considering renting out your house in Portugal for a few months — for example, 4 to 6 months? Then it’s important to understand the tax rules that apply. In Portugal, there is a clear distinction between regular rental and short-term tourist rental. In this article, we explain what kind of activity you need to register with the Autoridade Tributária (Portuguese Tax Authority) and what the implications are for your situation.

Two Options: Regular Rental or Alojamento Local?

Portuguese law distinguishes between two types of short-term rentals:

1. Regular Rental Without Services (CAE 68200)

If you rent out your property for a longer period to a single tenant (for example, a family or expat) and do not offer additional services such as cleaning, towel service, or guest check-in/out, this qualifies as a regular rental.

• What do you need to do?
• Register the activity using CAE code 68200 – Rental of real estate.
• Income is reported under Category F of personal income tax (IRS).
• You do not need to be self-employed.
• No VAT is charged.
• You are required to issue electronic rent receipts (recibos de renda) via the tax portal.

2. Tourist Rental (Alojamento Local – CAE 55201)

Are you renting to tourists for short stays (often under 30 days per booking) and offering services such as cleaning, linens, or key exchange? Then your activity falls under Alojamento Local.

• What do you need to do?
• Register the property as Alojamento Local at the local municipality.
• Register the activity using CAE code 55201 – Furnished accommodation for tourists.
• Income is reported under Category B of the IRS (self-employed/professional income).
• VAT may be applicable if annual revenue exceeds €13,500.
• You must issue invoices (fatura-recibo).

Practical Steps to Get Started

1. Log in to the Portuguese Tax Authority portal.
2. Register the appropriate activity (CAE code) under “Abertura de Atividade” (Start of Activity).
3. Follow the correct tax reporting procedure (Category F or B).
4. Don’t forget to issue electronic rent receipts or invoices.

In Conclusion

Short-term rental in Portugal can be financially rewarding, but it’s important to comply with the rules. By registering the correct activity with the Finanças, you avoid unpleasant surprises later. Not sure which regime applies to you? It’s best to consult a local accountant or tax advisor.

Do you need help drafting a rental contract, registering your Alojamento Local, or opening your activity with the tax office? Feel free to contact us.

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