Newsletter March 2006 - 2

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

Dear Rental Algarve client,

**In addition to my earlier letters please find press releases from Algarve News papers indicating that it does not seems to be all good news. **


The Algarve Resident

Has D-Day dawned for property rental licensing?

A MEETING was due to be hosted by the Direcção-Geral de Turismo (DGT), the general directorate for tourism, in Lisbon on Wednesday of this week (March 15), the day after this issue of The Resident went to press, to debate the application of Decree Law 55/2002, which regulates the licensing of properties for tourism purposes, reports The Resident’s Caroline Cunha. This legislation has hit the headlines in recent months (see January 20 and March 3 editions of The Resident) due to the outrage among the tourism sector at the fines being handed down by government watchdog, Inspecção Geral das Actividades Económicas (IGAE), the general inspectorate for economic activities, for non compliance. Much anger and frustration exists among villa owners and rental operators as, in practice, it has been found that it is virtually impossible to obtain the licence required due to the inability shown by local councils to process the related paperwork.

Many representatives from local councils and trade bodies throughout Portugal were expected to attend the meeting, although the majority were expected to be from the Algarve. Macário Correia, president of the Junta Metropolitana do Algarve, Hélder Martins, president of Região de Turismo do Algarve (Algarve Tourism Board), Elidérico Viegas, president of the Associação de Hotéis e Empreendimentos Turísticos (Algarve hotel and resorts association) and José Mendes Bota, president of the Parliamentary Sub-commission for Tourism and MP for the Faro District, were all due to be present, among other key figures. José Mendes Bota states that he implored the DGT to hold this week’s meeting in order to provide explanations. The MP for the Algarve is demanding that the government immediately suspend the inspections and the handing down of fines, and asks that the deadline to comply with the law be extended until the end of 2007.

Is the Algarve being singled out?

In Mendes Bota’s opinion, the Secretary of State for Tourism, Bernardo Trindade, “is ill informed,” adding that the câmaras are not prepared to issue the necessary licences. “The state has already inspected and fined several villa rental agencies in Albufeira, Almancil and Monte Gordo, but, in the rest of the country, we haven’t heard of anything with regard to this matter,” said Bota, implying that the Algarve is being singled out.

In a report featured in Correio da Manhã newspaper this week, it stated that the only câmara in the Algarve that is equipped to issue the licence is Faro, a situation that clearly makes nonsense of the legislation currently in place.

This is a burning issue, particularly in the Algarve, with many spectators saying that the fining spree is purely a money making exercise on the part of the government, which is desperately trying to balance its gaping state deficit.

According to a reliable source, owner of a private villa in Lagoa that is rented out to holidaymakers, the current legislation is totally unrealistic. “What we hope to achieve with this meeting is a more realistic approach,” he said. “I see myself as a victim of this legislation.

“While trying to find a solution for myself, I met with other owners to discuss the problem. We are asking for a total amnesty for the 35,000 projects involved. This makes sense because it is physically impossible for the Portuguese administration to issue all the licences and solve the problem wi

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