Portuguese CEAL tax: the complete guide 2024

Update: In May 2024, the new government proposed the reversal of several measures introduced by the ‘Mais Habitação’ package, including the CEAL (extraordinary contribution on short-term rentals). This article will be updated with more information if/when this tax is indeed repealed. Until then, we recommend reading this article, which covers all current government proposals to reverse the ‘Mais Habitação’ measures related to alojamento local / short-term rentals in Portugal.


The complete guide to the CEAL tax – alojamento local extraordinary contribution

‘Mais Habitação’ (lit: more housing) is the name given to a set of legislative changes (Law No. 56/2023, of October 6, 2023) that aim to make it easier to access long term housing. To this end, the amendments to the law intervene in many factors and stakeholders in the Portuguese real estate market, from tenants to investors, including owners of short-term rentals (STRs).

The most relevant measure from a tax point of view for the STR activity is the creation of a new tax: the CEAL (Contribuição Extraordinária sobre o Alojamento Local), which will now affect the vast majority of alojamento local owners.


What is the CEAL tax?

“Mais Habitação” stipulates that the alojamento local extraordinary contribution (CEAL) is a fixed rate tax of 15% which will fall on a variable tax base, not only related to the AL itself, but also other external factors .

This tax base is calculated via the relationship between the short-term rental’s economic coefficient and the urban pressure coefficient which is then applied to the gross private area of the rental (AL).

This tax base will be obtained by the relationship between the STR’s economic coefficient and the urban pressure coefficient applied to each rental’s gross private area.

We will go over these new terms and the calculation behind the alojamento local extraordinary contribution in this article. But before that, we answer some frequently asked questions for those looking for a quick summary of the tax.

If you are only interested in the tax formula, click here to scroll down the page.

If you are interested in the argument about the possible unconstitutionality of this alojamento local extraordinary contribution, click here first.

However, please note that despite the questions that are being raised, the tax has been approved, and its payment will be due. When or if there is any change, this article will be duly updated.


AL alternatives in Portugal - mid term rental management by GuestReady


Are all short-term rentals required to pay the CEAL?

Despite its generic name, the CEAL will not be applied to all short-term rentals with a valid license, and the exceptions are based on the location of the alojamento local, and even its use throughout the year. We will explain this next.

Short-term rentals obliged to pay the CEAL

The alojamento local extraordinary contribution (CEAL) applies to short-term rentals whose activity is carried out in residential properties, especially building units or fractions or parts or divisions of urban buildings suitable for independent use – especially in coastal areas (with some exceptions), as we will explain shortly.

CEAL will also apply to all short-term rentals that meet the legal requirements throughout the entirety of the Portuguese territory, including the autonomous regions of the Azores and Madeira.

Properties located in interior territories (as identified by the Government in the annex to Order No. 208/2017, which lists all official inland territories) and those located in municipalities that have not declared a housing shortage will not be subject to the CEAL.

The criteria that defines if the CEAL will apply or not to each short-term rental will be the existence of a valid short-term rental license (licença de alojamento local, registo de titularidade de alojamento local) on December 31 of each civil year.

We also remind you that, according to the other measures of Mais Habitação, short-term licenses will automatically expire if the license holder does not prove the licence is being used for its intended purpose on any given tax period. GuestReady has already contacted Tourism of Portugal and prepared a guide on this too, which will be published this week.


Short-term rentals exempt from paying the CEAL

Short-term rentals located in inland areas

“Mais Habitação” granted several exceptions to the short-term rental sector in a set of inland locations so that the they can continue to be developed through tourism activity. Although not all inland areas are free from all new rules, all short-term rentals in those listed inland areas are exempt from paying CEAL.

Short-term rentals operating in buildings in full ownership

Licenced short-term rentals not located in urban buildings in “horizontal property” or with full ownership but with areas or fractions capable of independent usage are exempt from praying the alojamento local extraordinary contribution.

In other words, detached houses will not pay CEAL, including those operating “estabelecimentos de hospedagem” (lodging).


Short-term rentals registered via rooms

Alojamento Local licenses can also be issued for rooms. These differ from room-renting lodging facilities, including hostels, as they are registered at the tax residence of the alojamento local holder and the number of licenced rooms cannot exceed 3 per property.

These room short-term rentals are also exempt from paying the alojamento local extraordinary contribution.

Short-term rentals registered in the owner’s permanent and main residence

SRT with a license registered in the same location as the owner’s permanent and main residence are also exempt from paying CEAL if the unit is not rented more than 120 days per year.

Please note that there is no official information yet on how these limits will be monitored, but we will update this article in the future.

Short-term rentals registered in properties intended for non-residential uses

Additionally, short-term rentals operating in properties whose constitutive title does not designate them for residential use are also exempt from paying this alojamento local extraordinary contribution. “Non-residential uses” mean, for example, properties intended for commercial use, which the municipality of Porto allowed to be converted into short-term rentals in its alojamento local regulations.

Possible exemptions

Short-term rentals in areas with reduced housing pressure

When it comes to exemptions based on geographical location, in addition to interior / inland areas, the short-term rentals located in parishes that meet all of the following requirements in a given year are also exempt from paying the CEAL:

      • The parishes are within municipalities whose yearly Municipal Housing Plan demonstrates an existing positive balance of housing and student accommodation supply in the municipality;
      • They are also located in municipalities that have not declared a housing shortage;
      • They do not have any part of their territory classified as a high-pressure urban area.

Please note that, since this is only confirmed after the year in which the STR has already operated, it is not possible to know in advance whether the CEAL will have to be paid for a given year in these parishes based on these criteria.

The CEAL payment

Many questions are still unanswered regarding the CEAL calculation and the implications of this tax, including whether this extraordinary contribution is constitutional or not. We will try to answer as many questions as possible in this article. If we have not been able to clarify all the doubts you may have, do not hesitate to contact our team without any obligation.

Who has to pay the CEAL?

All short-term rentals that are not exempt and have a valid license on December 31 of this year will start paying CEAL annually.

The debtor of CEAL will always be the local accommodation license holder.

However, if the license holder does not pay the tax, and if the property owner is not the same as the license holder, the owner will be jointly liable for this debt.

When and how is the CEAL paid?

The tax is due every year, and for this, the Government will have to provide an official form for the purpose of reporting the CEAL, which will have to be filled out and submitted by the license holder.

The deadline for submitting this declaration to the Portuguese Tax Authority ends on June 20 of the following year for which the CEAL applies, and the respective amount must be paid by June 25.

Is the CEAL deductible?

The alojamento local extraordinary contribution is not deductible. In other words, its payment is not considered for the determination of taxable profit in corporate income tax, even when accounted for as an expense of the taxable period.

What is a deductible expense?

Deducting an expense means that the amount paid is disregarded for the determination of profits, so that corporate income tax/personal income tax rates do not apply to these amounts that were actually spent on mandatory expenses, in this case related to the activity.

What is the CEAL rate?

The CEAL is a fixed rate of 15% that is applied to a variable tax base.

This tax base will vary depending on the performance of the short-term rental and traditional rental markets throughout the country, as we will explain now.

Calculation of the CEAL tax base

The taxable base on which the 15% CEAL is applied is determined by combining three factors: 1) the short-term rental economic coefficient, 2) the urban pressure coefficient, and then 3) the gross private area of the short-term rental itself.

How to calculate the CEAL of your local accommodation? Multiply the economic coefficient for local accommodation by the urban pressure coefficient, then multiply the result by the gross private area of your local accommodation, and finally multiply everything by the value of the rate for the extraordinary contribution of local accommodation (15%).


These two coefficients that will be applied to the gross area of the short-term rental are calculated based on flexible factors, including income generated in both the short-term and traditional rental markets throughout the country. Therefore, the exact values to be used in the CEAL calculation will be communicated annually by the Ministry of Finance.

The short-term rental economic coefficient

The short-term rental economic coefficient is calculated by the relation of two values:

1. The average annual income generated per available short-term rental room for the year prior to the one being calculated, a value that will be indicated by the National Institute of Statistics, I.P. annually.

        1. Attention! For the calculation of the tax due in 2023, the values obtained by INE for 2019 will be used.

2. The minimum gross area of a T1-type housing unit, a value that is defined by law as 52 square meters.

The urban pressure coefficient

The calculation of the urban pressure coefficient is also determined by the intersection of two values:

1. The base rent growth per m2 in the short-term rental location between 2015 and the year before the one being calculated,

2. divided by the base rent growth per m2 also between 2015 and the year before the one being calculated, in the area of the country where this variation is greater.

For more details on this issue, Article 7 of the annex to Article 22 of the Mais Habitação legislation also presents several paragraphs that seek to clarify the concept of “location” and how these values and their calculations will be determined and limited in relation to other land use conditions for CEAL payment assessment.

However, as we mentioned earlier, values used in these calculations will always be presented by the Ministry of Finance each year. The coefficients to be used in the calculation of the taxable base for 2023 CEAL will be published by the Government within 60 days of the entry into force of “Mais Habitação,” so this article will be updated soon.

Update on January 10th: this coefficient has different values for each area, and these values were published in an official ordinance on December 29th, which you can consult by clicking hereThe link is in Portuguese, but you’ll find a city list and, next to each city, the value you need to calculate your CEAL tax.


Update on the coefficients: Ordinance No. 455-E/2023, dated December 29th

Although in this ordinance, Article 3 is titled “economic coefficient,” it only presents information related to the urban pressure coefficient. The economic coefficient was not published. Below we present the coefficients used for the calculation in 2023 according to GuestReady’s experts’ legal interpretation.


Simulation: how to calculate the 2023 CEAL to be paid in 2024

To determine the CEAL you may owe for 2023, you should first consider both coefficients explained above (the short-term rental economic coefficient (which we’ve been calling the “economic coefficient” for simplicity in this post) and the urban pressure coefficient), and multiply them by the gross private area of your accommodation to calculate your taxable base. To ascertain the amount due, you should then calculate 15% on this base.

Given that the economic coefficient has not been published in an official ordinance, GuestReady’s experts present their legal interpretation of the current legislation. But caution: we remind you that these data are presented by us so that you can simulate how much you may have to pay this year to have an approximate value in mind. It is possible that our interpretation of the law or even our calculations do not coincide with the final formula to be presented by the Tax Authority (AT) before the payment period. As soon as this information is published, we will update this article if necessary. Until then, we hope to help you have an idea of the amount you may owe.

How to calculate the CEAL of your local accommodation in 2023 for payment in 2024? Multiply 209,875, the economic coefficient value for local accommodation to consider in 2023, by the urban pressure coefficient, which should be found in Ordinance No. 445-E/2023. Then multiply the result by the gross private area of your local accommodation, and finally, multiply everything by the value of the rate for the extraordinary contribution of local accommodation (15%, i.e., 0.15).


Short-term rental economic coefficient for 2023: based on the average income per room of short-term rentals in 2019 (RevPAR 2019 as published by INE), we will multiply this value (which is 29.90 euros) by a fiscal year (always 365 days), thus obtaining the annual average income the Mais Habitação legislation requires, “10,913.5”. Next, we will divide this value (10,913.5) by the minimum size of a 1-bedroom apartment (52m2). Then, we obtain the value 209.875 as the economic coefficient of local accommodation for 2023.

Urban pressure coefficient for 2023: as this coefficient depends on the location of your property, you should look for the “zone” in the list published by the government on December 29th in Ordinance No. 455-E/2023 (you can click here to open the Diário da República page with the publication of this list – again, the page is in Portuguese, but you’ll find a list of all the areas and the number you need right in front of it).

STR area: you need to get this value from your property registry document (“Caderneta Predial”), and it is listed as “área bruta privativa” of your short-term rental (STR).

CEAL rate: the CEAL is a 15% tax that applies to the taxable base we calculated above with the coefficients multiplied by your property area. Thus, we finish this calculation by determining these 15% (multiplying the previous result by 0.15).


Practical simulation:

We will consider a property located in Porto, in Campanhã, with an area of 75 m2. According to Ordinance No. 445-E/2023, the urban pressure coefficient to consider will be 0.4854.

Thus, we will calculate: Economic Coefficient x Urban Pressure Coefficient x STR Area x 0.15 = 209.875 x 0.4854 x 75 x 0.15 = 1,146.07 euros.


The possible unconstitutionality of the alojamento local extraordinary contribution

Various aspects of this extraordinary contribution are being questioned as possibly unconstitutional.

One of them is the fact that the tax may be due by the owner of the unit allocated to the local accommodation activity, not by the activity licence holder, thus creating joint liability for the property owner when they are different persons.

However, the main legal criticism of CEAL concerns a possible violation of the constitutional principles of taxation based on real income and the ability to contribute.

These principles underlie the use of progressive rates and percentages in the Portuguese tax system, so that taxpayers with similar incomes pay similar amounts, but taxpayers with different incomes pay different amounts.

As we explained, the CEAL does not use the revenues actually generated by each short-term rental in its calculations.

Instead, the law opted to use the short-term rental economic coefficient, using the average income earned by local accommodations throughout the national territory (the value that is to be shared by INE each year).

This means that the base will be the same, even in situations where the incomes earned are very different because the calculation uses values that are the same for all.

In other words, two local accommodations with very different availability (one available for rent for two months, another available year-round), and thus with very different incomes, will pay a similar tax because the CEAL uses those values.

It is worth noting that in the specific article (article 6, paragraph a, of the annex to Article 22 of Law No. 56/2023, of October 6, “Mais Habitação”), it states: “The average annual income per short-term rental available room calculated by the National Institute of Statistics, I.P., for the year prior to the tax event.”

For this reason, the tax disregards actual individual ability to contribute, and is based on a “presumption of income” principle, with property owners being taxed based on what they are presumed to have earned through the generalization of short-term rental income generated, rather than what they actually earned in the relevant tax year.

However, despite its possible unconstitutionality, which must be argued in the competent forums (for example, with objections and/or judicial challenges to the settlement of the CEAL), the alojamento local extraordinary contribution has been approved and is due for short-term rentals with a valid licence on December 31, 2023.


AL alternatives in Portugal - mid term rental management by GuestReady


Other questions regarding the CEAL

As we explained, the CEAL will only be due for licenses valid on December 31, 2023, so you have plenty of time to seek tax and legal advice until you find out how much your short-term rental may pay annually.

GuestReady also has a team of experts in the alojamento local and short-term sector and is always available to support property owners, offering advice and property management services for those looking to increase their income, whether in the form of short-term or other competitive rental markets, like mid-term and flexible mid-term rentals.

Contact us to discover the solutions GuestReady has for you and continue to earn a consistent high income, benefit from a network of professionals who will support you with all your questions and legal issues, and even leave behind the worries of daily logistical operations management.

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