Villa licensing and no progress

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The problems affecting the licensing of properties for rent deepened this week.

A villa owner in Quinta do Lago made public some documents that show it is impossible to obtain the necessary licence to rent a private villa to holidaymakers.

After submitting plans, drawings and all the necessary application forms to Loulé Câmara to alter the property’s usage classification from habitation purposes to tourism so it could legally be rented to tourists, the owner received a refusal letter in December from the Direcção-Geral de Turismo (DGT), the entity with the final say on the matter.

According to correspondence seen by The Resident, the reason given was the fact that the alvara do loteamento (the master planning document submitted when the resort was first developed) only allows for properties to be used for habitation purposes. Unless the original plans are altered and re-submitted properties within the resort cannot be licensed for rental to tourists.

The licensing issue was first thrown into the spotlight when government watchdog Autoridade de Segurança Alimentar e Económica (ASAE), the entity responsible for inspecting restaurants, hotels and businesses began visiting villa agencies last January and fining management and owners for not holding a Licença de Utilização Turistica for properties being rented to tourists.

It became clear that câmaras were not prepared to process the heavy paperwork required to meet the legislative requirements and issue licences. It was not known at that time that even if the paperwork had been able to be processed, many of the resorts’ alvaras would present a barrier.

Since January 2006, a series of meetings have been held between business associations and property owners attended by MPs and representatives from tourism organisations to discuss the problem. A meeting was held at the DGT in Lisbon last March, when câmara presidents, the tourism board and various business associations sought clarification and solutions to make the licensing legislation workable. No solution was found.

The topic then slipped from the headlines.


Despite the fact that câmaras and tourism authorities agree that the law must be changed, it seems the government is digging in its heels. The Resident received information this week that ASAE began making inspections again at villa agencies in the Algarve last Friday.

The Resident contacted Shirley Dunne, owner of a villa agency in Almancil for her reaction to the case involving a property owner from Quinta do Lago.

“Effectively the government is closing down the villa rental market. When this reaches the foreign press it will deter people from buying in Portugal, which will impact on the building and real estate sectors. If properties are not available for rental, tourists will go to other countries, causing a huge loss of revenue for Portugal. All businesses involved in the tourism sector will be adversely affected, resulting in redundancies and bankruptcies. In one fell swoop the government is cutting off its revenue receipts and increasing its outgoings massively.”

The Resident also contacted president of the Algarve Tourism Board, Hélder Martins for his view.

“This is a big economic and social problem for the Algarve,” he said. “The only solution is to make a new law. The DGT says that it is impossible to approve these villas for rental to tourists because they are located in a place defined for habitation purposes only. In my opinion, it would be impossible for Loulé and Albufeira câmaras to change all the alvaras for the major resorts. If the government want to find a solution to this they need to change the law.”

For Hélder Martins, the solution is relatively simple: “As I have said before, I believe it should be the responsibility of the tourism board to register properties for tourism use. We can have a department here to organise this. When an owner applies to rent out their property, a small team would be sent to check if the property is clean and safe. If it passes, it would be registered and then visited again from time to time to make sure standards are kept. We would then exchange information with ASAE and the finanças.”

Hélder Martins met with the Secretary of State Bernardo Trinidade and the Civil Governor, António Pina last week and warned Trinidade that ASAE could start inspecting again and that the situation needed to be resolved.


“It was evident that the Secretary of State for Tourism had not realised that câmaras are not licensing properties for rental purposes. He thought a few thousand had already been licensed and was shocked when I told him that in total only around 10 had,” said Hélder Martins.

“He thought it was possible to solve this problem with the câmaras, but that is not possible. I am pressing those responsible in the government for a solution.”

José Mendes Bota, president of the Parliamentary Sub Commission for Tourism and Social Democrat MP for the Algarve said: “The present government plays the game of deaf and blind governance very well and is ignoring the importance of residential tourism. It is even trying to kill it, denying licences for tourism purposes due to alvara regulations for properties that happen to be mainly in the Algarve region.

“The present law is so demanding that it has become inapplicable. By putting in force alvara regulations, as well as building regulations that restrict properties to habitation use only, hardly anyone will be able to get a licence if the property is in a resort area or urbanisation. Even remission to the Regulamento de Hospedagem (guest house accommodation regulation) will not solve the problem.”

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