Lack of progress on holiday property licensing


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DESPITE THE efforts of various organisations in the Algarve and the lobbying of MPs and business groups, no progress has been made in relation to solving the licensing problem concerning the rental of private properties to holidaymakers.

The Resident reported in January that government inspectorate, the Inspecção-Geral das Actividades Económicas (IGAE), now renamed Autoridade de Segurança Alimentar e Económica (ASAE) had been making surprise inspections at villa rental agencies across the Algarve, particularly in the Almancil area.

Large fines were being given to agency and villa owners if properties being offered for rental did not hold a Licença de Utilização Turística (licence for tourist use).

At that time, The Resident also reported that câmaras in the Algarve were not equipped to issue the necessary licences in terms of knowledge, awareness of the criteria and procedures, as well as personnel resources to carry out the inspections and process the necessary paperwork.

Meanwhile, câmaras and several tourism entities in the Algarve admitted that the present legislation relating to the rental of holiday properties was completely unworkable.

At a public meeting held in Vilamoura just before summer, a commission was formed to try to resolve the problem and present a proposal for alternative legislation. Since then everything has gone quiet.

When the President of the Republic, Cavaco Silva visited the Algarve in September and held a meeting with the 16 council chiefs, it was rumoured the licensing problem would be discussed.

However, Macário Correia, president of AMAL, the entity that represents the councils of the Algarve, told The Resident that it wasn’t discussed and that the present legislation still stands.

This week, The Resident contacted Aníbal Moreno, president of the Almancil Business Association to find out the latest situation. “There is no news at all yet,” he said. “It is very disappointing. Dr. Vítor Neto, the former Secretary of State for Tourism has made contact with members of the government as has José Mendes Bota, the Social Democrat MP for the Algarve and head of the Parliamentary Sub-Commission for Tourism and others, but nothing has happened yet,” he said. 

“In the meantime, I am aware that villa owners have been submitting projects to their local câmaras to try to obtain the necessary licence, in accordance with the legislation currently in place. The câmara has sent the paperwork to the Direcção Geral de Turismo (DGT) for its opinion, which has then been sending back responses recommending the câmaras to fail the projects. The câmara then forwards the paperwork to the property owner for them see what changes the DGT is demanding.

“I know of a case where a house did not have an office. The current legislation says that the house must have an office/ reception to receive tourists, while the owner says that the office is at the villa agency. Other similar problems have arisen and so we are back at square one. It is impossible to follow this legislation and obtain the licence. Property owners are spending good money to have all the necessary drawings made by architects and  changes made to their property to try and get the project passed to obtain the licence. However, they seem to be doing this for nothing, as the DGT is still coming back finding reasons to fail the applications,” says Aníbal Moreno.

For now, it seems that no inspections are being made by ASAE – Aníbal Moreno says he has not heard of any in the Almancil area recently. Also, those that received notification of the fines they would be charged have yet to receive the official demands. Moreno believes that these will be issued for payment at some point by the end of the year.

Hotel owners to blame?

“I sincerely believe that the reason the legislation has not been changed is because of a powerful lobby of hoteliers, probably in the Lisbon area. I believe they are behind this and are putting pressure on the government to make this difficult. They want people to stay in the hotels in Lisbon and not come to the Algarve and rent villas”, Moreno said.

“I maintain my position. We need to have legislation so that standards are maintained and controlled at rental properties, but the current legislation is not appropriate.”

The Resident also contacted Shirley Dunne, the owner of a villa management and rental agency in the Almancil area.

“We have written letters to the President, the Prime Minister, the Tourist Board and to the cãmara, but we are not getting a response,” she said. “A lot of my clients have stopped renting out their properties because of this legislation. They don’t want to turn their private homes into commercial looking properties with signs everywhere, a reception and illuminous pictures of green men and arrows pointing to doors all over the house!

“Also it is very expensive to have the plans to the house re-drawn and have lots of alterations made. Registration is a good thing, but it does not make sense to apply hotel legislation that relates to a 500-bedroom building to a private two-bedroom villa.”

Shirley is insistent that the legislation is unworkable. “Loulé Câmara does not have the staff to cope with applications from 6,000 plus villa and apartment owners in the Quinta do Lago and Vale do Lobo areas. What we need is sensible legislation and a simple registration form.

“In Albufeira, some owners are managing to license their villas as B&B’s, with a Licença de Utilisação para Hospedagem, but this option is not available at Loulé Câmara,” she said.

“It is fine for those people who do not have a mortgage, but some people take the rental income into consideration when making financial arrangements to purchase a property in Portugal. With the problems currently existing to license their home for rental use they will buy in Spain, Turkey or elsewhere.”

Villa holidays versus hotel breaks

When The Resident asked Shirley what she thought about Aníbal Moreno’s suspicions concerning hotel owners she said: “If they think this will make the tourists stay in hotels instead, they are wrong. If people like villa holidays, they like villa holidays. It is a completely different holiday experience to that of staying in a hotel.

“If this problem continues there are going to be less and less villas being rented out for tourists and so people will just choose to take a villa holiday in Spain, France or Turkey, for example, they won’t book a hotel in Portugal instead. 

“The government seems to be intent on damaging tourism. I think it will only wake up in 18 months or so when income and tax revenue is down due to lower number of tourists and tax coming in from businesses and property owners. Then we will see a knee-jerk reaction.”

• Have you had a problem licensing your villa or apartment? What do you think about the current legislation. Write to [email protected] and let us know about it.