Local Accommodation: tax obligations and good management practices

The local accommodation in Portugal continues to grow, attracting investors and small owners who want to monetise their properties. But like any economic activity, real estate involves tax responsibilities and careful financial management. Many owners end up being surprised by the complexity of their obligations and the impact that poor organisation can have on their results.

Tax obligations for local accommodation

Registration and legal framework

Before starting the activity, it is mandatory to register the property at the Balcão Único Eletrónico and comply with the applicable municipal rules. In addition, the owner must open a tax office, choosing the most appropriate classification (category B - business and professional income).

Taxation

Income from local accommodation can be taxed at simplified regime or organised accountingdepending on annual turnover.

• No simplified regimeA tax coefficient is applied to the declared income.
• In organised accountingThere are more obligations, but also greater possibilities for deducting expenses.

VAT and other taxes

Depending on the billing and the location of the property, there may be additional obligations such as charging VAT or paying municipal tourist taxes.

Good management practices for LA

• Clear and separate accounting - keep a bank account dedicated to the local accommodation business to avoid confusion with personal finances.
• Cash planning - Anticipate low seasons and create financial reserves to withstand less busy months.
• Management of deductible expenses - Expenses such as maintenance, cleaning services, insurance or platform commissions can be used for tax purposes.
• Technology as an ally - use management software for bookings, invoicing and financial control, making it easier to fulfil tax obligations.

The role of consultancy and accounting in AL

Have professional support in the area of accounting and consultancy makes all the difference for local accommodation owners. As well as ensuring compliance with tax obligations, it helps to optimise the tax burden, organise finances and make strategic investment and expansion decisions.

Conclusion

Local accommodation can be a very profitable business opportunity, but it is only sustainable when it is supported by a rigorous financial management and compliance with tax rules. With specialised support, it's possible to turn a property into a solid, safe and profitable long-term asset.

How Precision Advisory can help Local Accommodation

At Precision Advisory, we help local accommodation owners and investors run their businesses in an organised, efficient and tax-optimised way. We know that the rules can be complex, but with our support you can guarantee peace of mind and greater profitability.

Our support includes:

• Opening and correct fiscal framework of the activity;
• Accounting and tax management adapted to the simplified or organised accounting system;
• Monitoring tax and municipal obligations to avoid fines or surprises;
• Financial and treasury planning, ensuring stability even in times of lower demand;
• Strategic consultancy to evaluate investments and increase property profitability.

With our experience in accounting and consultancy for the property and tourism sectors, we help turn local accommodation into a safe, profitable and sustainable business.