VAT and IMI on Alojamento Local and hotels in Portugal in 2026: art. 53 exemption, 6% rate, IMI and AIMI

Updated: 10 November 2026

Besides income tax, anyone running an Alojamento Local (AL) or a small hotel in the Algarve deals with two taxes every year: VAT (IVA) on what guests pay, and IMI property tax (sometimes AIMI too) on the building. We read the tax authority's circular on the new art. 53.º small business exemption, four binding rulings, articles 18 and 41 of the VAT Code and articles 112 and 135-B of the IMI Code on the Portal das Finanças, and the tax pages of two Algarve municipalities. Links are at the end. Where we could not confirm something, we say so. This is not tax advice: for your own case, ask your certified accountant.

The short answer

In November 2026, according to the official sources we read:

Accommodation, including AL, is taxed at the reduced VAT rate of 6% on the mainland (List I, item 2.17, and art. 18(1)(a) of the VAT Code, CIVA).
If you have your seat or domicile in Portugal and invoiced no more than 15,000 euros in the previous calendar year, you may use the special exemption scheme of art. 53.º: you charge no VAT, but you cannot deduct VAT on your costs.
Under the normal scheme, the VAT return is quarterly (by the 20th of the second month after the quarter) if turnover is below 650,000 euros.
IMI on urban property ranges from 0.3% to 0.45%, depending on the rate each municipality sets (IMI Code, art. 112).
In urban pressure zones, the municipality may raise the IMI rate by up to 100% for property used as AL (art. 112(19)(a)).
AIMI applies to residential urban property and building land; property classified as commercial, industrial or services is excluded (art. 135-B(2)).

VAT: 6% on accommodation

VAT Code, art. 18 and List I:

Mainland rates: 6% (List I), 13% (List II) and 23% (standard). The Azores and Madeira set their own rates (no. 3); we did not confirm the figures.
Item 2.17 covers, in the tax authority's words, accommodation in hotel-type or similar establishments, «incluindo alojamento local» (binding ruling 29462, March 2026).
A cleaning fee charged with the stay follows the accommodation and pays 6%. If the guest books extra cleaning separately, that cleaning pays 23% (same ruling).
Management contracts (cessão de exploração): whoever provides the accommodation in their own name invoices 6%; what the operator pays the owner is a service at 23%, unless the owner is under art. 53.º (binding ruling 30668, August 2026).
Breakfast, meals and other services: see our general guide /vat-hotel-night-holiday-rental-rates-2026; we do not repeat those rules here.

The art. 53.º exemption

As worded by Decree-Law 35/2025, according to the tax authority's Circular 25062/2025:

Threshold: annual turnover in Portugal, in the previous calendar year, not above 15,000 euros (net of VAT).
Only for taxpayers with their seat or domicile in Portugal: a non-resident owner with no domicile here is excluded, even if registered for VAT (no. 3).
The law does not exclude accommodation: the circular only rules out exports and related activities and one-off transactions. The tax authority expressly accepts art. 53.º for AL owners under a management contract (binding ruling 30668).
If you start mid-year, you estimate turnover up to 31 December, without converting it into an annual figure (the circular's example: starting in July with 10,000 euros expected).
Your invoices must say «IVA – Regime de Isenção». You cannot deduct VAT on purchases (works, furniture, commissions).
We did not confirm in an official source exactly which filing obligations remain under the scheme (art. 57 of the VAT Code did not open for us): check with your accountant.

When you leave the exemption

Circular 25062/2025 and binding ruling 29188:

If you exceed 15,000 euros in a year, you file a change-of-activity return within 15 working days after the year ends and charge VAT from 1 January (for 2025, the deadline was 22 January 2026).
If, within the year itself, you pass 18,750 euros (15,000 plus 25%), VAT is due from the invoice that takes you over that figure (art. 58(5)(b)).
Example: an AL apartment that invoiced 14,000 euros in 2025 may be exempt in 2026; if it reaches 18,750 euros in August, the invoice that crosses that figure already carries 6% VAT.
With booking platforms, count what you invoice the guest for the stay, not what you receive after commissions; check with your accountant if in doubt.

The periodic VAT return

VAT Code, art. 41 (Portal das Finanças):

Monthly scheme: turnover of 650,000 euros or more in the previous year; file by the 20th of the second month after the month of the transactions.
Quarterly scheme: turnover below 650,000 euros; file by the 20th of the second month after the quarter (for example, Q3 by 20 November).
June and the second quarter: by 20 September.
You can opt for the monthly scheme in your start-of-activity or registration return (no. 2).

IMI: rates and AL

IMI Code, art. 112, and binding ruling 9931:

Urban property: 0.3% to 0.45%. The municipal assembly sets the rate every year; if it does not notify the tax authority by 31 December, 0.3% applies.
The municipality may cut the rate by up to 20% for let property (no. 7), but AL is not a residential lease: do not count on that reduction without checking.
Urban pressure zones: a surcharge of up to 100% for property used as AL (no. 19(a)), by decision of the municipal assembly. We did not confirm which Algarve municipality applies it today.
Opening an AL in an apartment does not by itself change how the property is classified: the municipality's use licence is what counts. If the licence changes to services, the VPT use coefficient goes from 1.00 to 1.10 and you have 60 days to file the IMI Modelo 1 return (binding ruling 9931).
IMI for one year is paid the next: one instalment in May up to 100 euros, May and November up to 500 euros, May, August and November above that (PwC 2026 Tax Guide, not an official source).

IMI rates in the Algarve

From the official pages we could open:

Tavira: 0.30% for urban property (rates approved by the municipal assembly on 30 December 2025, under the heading 2026), a 20% cut for property let as a permanent home, a 30% surcharge for run-down buildings in the historic centre and a family IMI reduction of 30, 70 or 140 euros depending on dependants. The page does not mention AL.
Albufeira: the council proposed 0.3% in its «Taxas para 2025 respeitantes a prédios urbanos», that is, IMI for 2025 collected in 2026 (meeting of 18 November 2025, unanimously approved by the council). The municipal assembly vote: to be confirmed.
Loulé: the municipal assembly voted the 2026 municipal tax package on 19 December 2025, with reductions for inland parishes and families with dependants; the actual rate: to be confirmed.
Faro: we could not open the council's page; rate to be confirmed.
Always check your property's rate on the IMI payment notice on the Portal das Finanças.

AIMI: the additional IMI

IMI Code, arts. 135-A and 135-B, and the Portal's FAQ:

It is charged on the total VPT of the urban property you hold on 1 January: «prédios urbanos habitacionais e os terrenos para construção» (residential property and building land).
Property classified as commercial, industrial or services, and as «other», is excluded (art. 135-B(2)).
An AL house or apartment with a residential licence counts towards AIMI. The tax authority has ruled that a residential property is not excluded (binding ruling 18433); there is no special rule for AL.
A hotel or other tourist establishment registered as services: outside AIMI. Check how yours is registered in the caderneta predial (property record).
Individuals only pay above 600,000 euros of VPT (1,200,000 euros for married couples opting for joint taxation), at 0.7%, with 1% and 1.5% on the higher bands; companies, 0.4%; payment in September. These figures come from the PwC 2026 Tax Guide (not official); we did not open arts. 135-C and 135-F on the Portal.
AIMI may be deductible for IRS or IRC on property used for letting or hospedagem, under conditions: check with your accountant.

What about income tax?

AL income is taxed under IRS category B, with coefficients of 0.35, 0.50 or 0.15: see our guide /portugal-local-accommodation-income-tax-irs-category-b-2026.
IMI paid is one of the costs that matter when weighing the category F option described in that guide.
Containment areas and municipal AL rules in the Algarve: see our guide /algarve-local-accommodation-new-registrations-containment-areas-municipal-rules-2026.

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Frequently asked questions

What VAT does Alojamento Local pay in Portugal in 2026?

6% on the mainland, like other accommodation (List I, item 2.17 of the VAT Code), including a cleaning fee charged with the stay. If you invoiced up to 15,000 euros last year and are domiciled in Portugal, you may be exempt under art. 53.º.

What is the art. 53.º VAT threshold in 2026?

15,000 euros of turnover in Portugal in the previous calendar year. If you pass 18,750 euros within the year, VAT is due from the invoice that crosses that figure.

Does an AL pay AIMI?

If the apartment or house is registered as residential, it counts towards AIMI, which individuals only pay above 600,000 euros of VPT. Property registered as services, like most hotels, is excluded (IMI Code, art. 135-B(2)).

Sources

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