April 2007

Insights into what is involved in buying, selling & living in Portugal

Government inspections launched a mega operation last week targeting holiday villas and rental accommodation across the Algarve. A total of 147 fines were issued for various infractions, but primarily to property owners not holding the requisite rental licence.

Five teams from the Autoridade de Segurança Alimentar e Económica (ASAE) made a total of 64 inspections over April 10, 11, and 12, targeting private owners and middlemen such as villa rental agencies and real estate firms. In total, 122 of the total number of infractions registered related to owners not holding a Licença de Utilização Turística, the licence required by those wishing to rent their property to tourists, travel agencies and real estate brokers found operating illegally, the promotion of unlicensed holiday properties and the failure to provide a complaints book.

This is the second wave of inspections to take place within a month. On March 22 and 23, a total of 44 inspections were made resulting in the registration of 39 offences.

Obtaining a Licença de Utilização Turística from a câmara is complex, costly and time consuming – property owners can pay upwards of 1,200 euros and it can take many months. In addition, owners of villas in some resorts are being turned down as the alvará do loteamento, the master planning document for the resort, excludes villas being used for tourism rental purposes.

The Resident spoke to Aníbal Moreno, president of the Almancil Business Association, who has been one of the main players campaigning for the legislation to be altered. “There has been no change in the law despite promises made by the Ministry for Economy. We are in exactly the same position as we were one year ago, the only difference is that lots of people have now tried to get the licenses and failed.” Moreno told The Resident he is currently working on a report to send to the Minister for Economy.

Despite repeated attempts by business groups, tourism entities and câmara chiefs to persuade the government to make the licensing legislation more straight forward, their calls seem to have fallen on deaf ears. A source from ASAE told The Resident: “It is not our business whether the law is a good one or not, we are just doing our job. If we discover an offence we must report it. We are doing our work and the câmaras must do theirs. What I can tell you is that no one has been physically fined to date but notification letters are being sent out.”

Cristina Feijó of Caspo Business, a villa rental agency in Carvoeiro, takes a different view. Her company is facing up to the legislation and launched a service in January of this year (see February 16 issue of The Resident) to prepare licence applications for its clients. “It is not so difficult to get a licence. I think people like to exaggerate so that they have an excuse not to apply. People will only have problems if they have extra rooms or bathrooms which are not in the property’s original plans at the câmara.”

Cristina told The Resident that she has submitted several licence applications to câmaras in the western Algarve and is awaiting a response.

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