Accounting for short-term rentals.

Accounting for short-term rentals (alojamento local) in Porto

Who is it for?

Owners with one or more holiday let properties – whether as individuals or through a company – as well as hostels and guesthouses, and holiday let managers. Also for those who own a property in Portugal but live abroad.

Income Tax: how much of your earnings is taxed

For sole traders, short-let accommodation is classified as Category B income. Under the simplified scheme, personal income tax is levied on a portion of the income received, which depends on the type of accommodation and its location (Article 31 of the Personal Income Tax Code):

• House or flat: 35% (performance);
• A house or flat in a flood-prone area as defined by the local authority: 50%;
• Accommodation providers and rooms: 15%.

For houses and flats, 15% of your income must be accounted for by expenses — and this includes, in addition to business invoices, 4% of the property’s value, where it is owned by you. With organised accounts, you pay tax on actual profit; compare the two in the simplified tax regime simulator or organised accounting.

VAT at 6% and exemption up to €15,000

Accommodation is subject to VAT at the reduced rate of 6%. Those with an annual turnover of up to €15,000 may be exempt (Article 53 of the VAT Code). However, commissions from Airbnb and Booking are invoiced from abroad and are subject to their own VAT rules, even for those who are exempt — this is one of the most common mistakes we come across.

The property used for business purposes

Registering your home as a holiday let has consequences should you one day sell it or return to using it as a main residence: capital gains are then subject to their own set of rules. It is worth deciding in whose name the property will be held — and whether it makes sense to set up a company — before you begin. The property capital gains calculator It helps to see the impact.

Other obligations

• Registration of the private accommodation with the local council and display of the sign;
• Registration of foreign guests;
• Municipal tourist tax, charged to guests and paid to the local council;
• Social Security contributions for self-employed workers, which may be waived for those in paid employment or pensioners, subject to certain limits.

The special levy on private accommodation, introduced under the ‘Mais Habitação’ programme, was repealed in 2024.

How we work

1. Before opening. We choose between being self-employed or a company, and the income tax and VAT schemes.
2. Throughout the year. Invoicing, VAT, platform commissions and National Insurance, with the relevant documents available via the client portal.
3. On the IRS. Appendix B or organised accounts, with the accounts finalised before submission.

The accounts and tax returns are signed by a Certified Accountant registered with the Institute of Certified Accountants (see Legal information). The rules described here are those for 2026; the classification of each case is always confirmed at the first meeting.

Frequently asked questions

How much income tax do I pay on short-let accommodation?

Under the simplified scheme, income tax is levied on 35% of the income you receive from a house or flat (50% in a restricted area), added to your other income and income tax rates. You can work out the figures using the income tax calculator.

Do I have to charge VAT to guests?

Only if you earn more than €15,000 a year; up to that amount, you may be exempt. Above that, accommodation is subject to VAT at 6%.

I live abroad. Can I run a short-let property in Portugal?

Yes, we can. We handle the accountancy and tax affairs for non-residents, and we communicate via email and video calls.

Is it worth running a private accommodation business?

For a single flat, rarely. If you own several properties, or are planning to invest further, it might be worth it. We’ll work out the figures first.

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