Municipalities align with the Liberal Initiative and want local accommodation equivalent to housing

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The question has long been the subject of different interpretations, whether among joint-owners, among deputies and even among judges: does local accommodation (LA) fit into the concept of housing or should it be considered a commercial activity? The last response from the courts, determined in a judgment of uniformity of jurisprudence of the Supreme Court of Justice (STJ), says that local accommodation cannot be considered housing. In Parliament there are two initiatives to clarify the law, but in a diametrically opposite direction. – the Left Block wants to close the door to AL in residential buildings, IL wants to expressly consecrate this possibility. The National Association of Portuguese Municipalities (ANMP) is now joining the discussion, clearly aligning itself with the position of the liberals.

In two opinions on the bills presented in the Assembly of the Republic, the ANMP gives an “unfavorable” note to the BE initiative and, on the contrary, says it does not oppose the text of the IL. The representative organization of the municipalities argues that local accommodation “has served over the last few years as a complement or, often, the total sustenance of many families, giving the cities and towns where they are located, a greater capacity of beds than that made available by the facilities hotels”. To this argument, contrary to the prohibition of AL in housing fractions, the municipalities add another one: “The need to protect investors who chose to buy houses in Portugal to enter the local accommodation business and the multiple positive externalities that arise from it”. In particular, the effect that the LA “had on the renovation and rehabilitation, namely of historic centers, which were abandoned, without conditions of life and enjoyment”.

STJ says AL is not housing

Advocating totally opposite solutions, the two bills, which are awaiting scheduling, aim to clarify the situation of ALs that constitute fractions of residential buildings – the vast majority of cases in large cities. After some court rulings with the opposite sign, the case gained new dimensions last March, when a ruling to standardize the jurisprudence of the Supreme Court of Justice stipulated the understanding that LA activity is not allowed in fractions of buildings intended for housing. “In the horizontal property regime, the indication in the constitutive title that a certain fraction is intended for housing must be interpreted in the sense that local accommodation is not allowed”, wrote the STJ. Not having the force of law, the decision serves as a guide to future legal proceedings in which the existence of AL units in residential buildings is contested – and it can be by a single owner.

Following the STJ ruling, BE and IL then advanced with proposals to clarify the law, with the blockers following the STJ’s understanding and the liberals going in the opposite direction. IL wants to inscribe in the law that “the operation of AL establishments in an autonomous fraction of a building constituted as a horizontal property intended for housing in the constitutive title does not constitute a use other than that housing purpose”.

The BE, on the other hand, wants to prevent fractions destined for residential use from being reverted to commercial use (which would allow the maintenance of AL units, even in light of the STJ ruling). With one exception: this conversion will only be allowed in territories classified as low density. For BE, the “right to housing is not guaranteed, allowing thousands of houses that were intended for housing to now see their destination changed to commerce”, so the error must be “recognized and ensured that there is no rush to change the property titles”. An “error” that the blocist bench attributes to the Government, but also to the municipalities: both “failed”. for BE the “quick profit spoke louder and thousands of people were expelled from the place where they lived so that their homes became informal hotels”.

The AL is one of the main sources of the tourist tax charged by the municipalities. In Lisbon, for example, this fee earned the municipality’s coffers 38.8 million euros in 2019, a value that fell to 7.7 million the following year, due to the pandemic.

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