Villa licensing and no progress in Portugal

Buying, Selling and Living in Portugal

Villa licensing and no progress in Portugal

Villa licensing confusion continues

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.

Inspections

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 responsibi

This article is written and provided with permission by Robert M.L. Snapper, fully licensed real estate agent in Portugal.





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