However recently passed legislation in Portugal means anyone carrying out this practice without declaring it to the local council and applying for the relevant rental licence (Licença de Utilização Turística) are liable to face hefty fines if caught and prosecuted.

The Portuguese government categorises properties in need of a licence as those which are rented out for period of less than 30 consecutive days. So if your property in Portugal is utilised in this fashion then you must obtain the correct licence from your local council (Câmara) to avoid any brushes with the law.

ASEA, Autoridade de Segurança Alimentar e Económica, the governmental body overseeing the issue of these licences, is already clamping down heavily on establishments whom do not have the correct paperwork though these have mainly been in the Algarve, where . However during the earliest part of 2011 representatives have started trawling through the various properties available for let on the Silver Coast.

The law was introduced to ensure high standards of holiday accommodation in Portugal and to ensure all meet safety and hygiene standards. After all Portugal's main source of income does rely on tourism and ensuring the safety of guests to this country is paramount to ensure they return year after year.

Clampdowns by the ASEA have already seen hefty fines levied to property owners in the Algarve who rent out their properties on short term basis, but have failed to obtain the correct licence(s).

The fines for failing to comply are unlimited and could run into thousands so it is worthwhile arranging the paperwork if you are thinking of renting out your property to offset the maintenance costs or, if you are already doing so.

Where to Apply for a Short Term Rental Licence in Portugal

Short term rental licences are issued by the local council office (Câmara) to your property. However as this is Portugal, obtaining the relevant licence is not as easy as you would expect.

Unfortunately although central government has passed the legislation and is enforcing it sometimes they forget to keep local governmental offices informed of changes. Although the law has been in force for over two years, most councils in Portugal are unfamiliar with the paperwork required to secure a short term rental licence never mind issuing one.

However in addition to the stipulations of central government fAs well as there being a central law each individual council is able to stipulate additional conditions upon a licence application.

There are various companies, however most based in the Algarve, whom are equipped to handle the bureaucracy involved in obtaining these licences on behalf of property owners. There are handling fees to be paid to these companies, though they will need copies of documentation for the property in order to submit the application for a licence.

The plus sides to the licensing for property owners include state backed promotion and inclusion on a national register of rental properties promoted to thousands of overseas clients looking to holiday in Portugal.

To apply for a short term rental licence you will need to provide the following documentation alongside the application form to your local council office:

• Copy of Property Owners' Identity Card or Passport;

• Copy of the Property's title Deed (Cardeneta Urbana);

• Copies of Terms of Responsibility from those responsible for installing Gas, Electric, Water and/or central heating and air conditioning etc;

• A health and safety plan for the property;

• Terms of responsibility from person/company responsible in formulating the Health and Safety plan for the property;

• Floor plan of the property;

Information and Equipment needed for Short Term Rental Licence (Holiday Lets)

To obtain your short term rental licence you will need to ensure your property is equipped with the following documentation, equipment and to be of a standard considered adequate by an inspector:

• Fire safety equipment (extinguishers and fire blankets in the kitchen)

• Good general living conditions

• Buildings must be connected to all mains utilities (water, electricity, gas and sewage) or have their own provision of systems in place.

• The property must have hot and cold running water

• The property needs to have some sort of ventilation system (air vents)

• The property needs to be furnished and provide equipment  and utensils in accordance to advertised capacity and client needs

• The property needs to have adequate exterior locks and on bathroom doors.

• There must be at least one bathroom for at least three bedrooms. The bathroom should include toilet, basin and bath or shower.

• Clean change of linen should be made available once as week (minimum)

• There needs to be a book indicating the rules and regulations for use of the property

• Programme for cleaning of the property

• Complaints book (Livro de Reclamacoes)

• First aid facilities including relevant emergency telephone numbers displayed somewhere prominently

• Instruction manuals for all appliances within the property must be made available

• Adequate safety measures should be in place (EU standard) around swimming pools.

One thing which does escape many people's minds is the tax implication of running a short term rental property in Portugal. Don't' forget if you are earning any type of income in Portugal you will need to declare this to the government at the end of the tax year.

Income earned in Portugal is taxable in Portugal. However if you are from the United Kingdom and own a property in Portugal are are leasing it out on a short term rental basis, don't worry your income won't be taxed twice. Portugal and the United Kingdom have a double taxation agreement ensuring you won't be taxed twice on one income. However you will have to declare which country the income from your short term holiday rental is earned and pay the taxes accordingly.

By registering your property as a short term holiday rental you will benefit from full backing from the Portuguese tourist board and all the recommendations they can provide. In addition to this you will also have the peace of mind you are running your property to the letter of the law.

However one of the most significant benefits from registering is if you wish to sell your property it will be sold with a rental licence, which in itself has it's own value.