AIRNEST TOOL
Short-term rental profitability calculator
Data for Simulation
Total Purchase Price (€)
Average Revenue per Night (€)
Occupancy Rate (%)
Annual Expenses (€)
Management Fees (%) excl. VAT
VAT on AL Revenue (%)
* Calculations are indicative and intended as a guide only. You may be offered different terms. Based on average rate of our lowest risk businesses, and current fees, which may be subject to change.
Gross Annual Revenue (before tax)
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/year
VAT on AL revenue :
NaN €
Management fees :
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excl. VAT
(
NaN €
incl. VAT)
0,00 %
0,00 %
0,00 €
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Important Notes
Figures are provided for illustrative purposes only and do not constitute a financial guarantee. An accurate profitability projection requires consideration of all legal, tax, and operational parameters, as well as market trends and fluctuations — factors that are inherently variable and beyond control.
Update date : 22/09/2025
Understanding and Calculating Short-Term Rental Profitability in Portugal (2025)
Alojamento Local (AL), or short-term rental in Portugal, remains one of the most profitable real estate investments. However, true profitability is not the same as the gross revenue shown on Airbnb or Booking.com. To properly evaluate a project, you must consider all factors: revenue, occupancy rate, operating costs, VAT, taxes, and market trends.
Gross revenue : the starting point
The basic formula is simple :
Gross revenue = Average nightly rate × Occupancy rate × Number of bookable nights per year
Average nightly rate: depends on location, seasonality, and property quality.
Example: a central Lisbon apartment may rent for €120–200 in summer but only €70–100 in the off-season.
Occupancy rate: a well-managed property can reach 85%+ in peak season, but only 35–50% in low season.
Number of bookable nights: in practice, rarely 365 days/year. Some periods are blocked for maintenance, renovations, or personal use.
Operating expenses
Even if self-managed, an AL property generates both fixed and variable costs:
Platform commissions: 15–18% VAT included (Airbnb, Booking.com, etc.)
Cleaning and laundry: charged per stay or included in the rate
Utilities: water, electricity, internet
Maintenance: small repairs, equipment replacement
Tourist tax: usually €1–3 per night (paid to the municipality)
Insurance: property and liability coverage
VAT : exemption or 6% rate
In Portugal, tourist accommodation benefits from a reduced VAT rate of 6%.
Two options exist:
VAT Regime | How it works | Advantages | Drawbacks |
|---|---|---|---|
Exemption (0%) | No VAT charged or recovered. Price charged = price paid. | More attractive prices, less admin. | Cannot recover VAT on purchases/renovations. |
6% VAT regime | Charge 6% VAT on nightly rates, remit to the state, and recover 23% VAT on expenses. | Beneficial if you have high investment or expenses. | Higher final price for the guest, heavier accounting. |
Example:
Exemption: €1,000 collected = €1,000 net before expenses.
6% VAT: €1,000 incl. VAT → €943.40 net + VAT recovery on purchases.
Income tax (Recibos Verdes – IRS)
If you operate as an individual, your income falls under Category B (self-employed). In the simplified regime, only part of your gross revenue is taxable through a coefficient:
Outside contention zones: 0.35
Inside contention zones: 0.50
Then, taxable income is subject to progressive IRS rates:
Annual taxable income | IRS rate |
|---|---|
Up to €7,703 | 13.25% |
€7,703 – €11,623 | 18% |
€11,623 – €16,472 | 23% |
€16,472 – €21,321 | 26.5% |
€21,321 – €27,146 | 28.5% |
€27,146 – €39,791 | 35% |
€39,791 – €51,997 | 37% |
€51,997 – €81,199 | 45% |
Over €81,199 | 48% |
Example:
Gross annual revenue = €30,000
Coefficient outside contention zone = 0.35 → taxable income = €10,500
If your marginal IRS rate is 26.5%, tax = €2,782.50 (excluding social contributions).
Net profitability before and after tax
Before tax:
Gross revenue – (Commissions + Expenses + VAT) = Net income before tax
After tax:
Net income before tax – (IRS or Corporate tax) = Final net income
What your calculator does not include
A profitability projection must also account for:
Market trends (price and occupancy evolution)
AL restriction zones (impact on future resale value)
Mandatory future works (energy efficiency, safety)
Specific taxes and social security contributions for your structure
Final thoughts : more than just numbers
Short-term rental profitability is never fixed. It depends on strategic choices (legal structure, VAT regime, pricing strategy) and operational quality. A realistic estimate must analyse every factor along with local and legal conditions.
I can also create a condensed version of this for your website so that visitors see an educational, value-added explanation right under your calculator, and then click for the full article.
Do you want me to prepare that short, engaging version too ?
And most importantly… you have nothing to manage — we take care of everything
At Airnest REIM, we don’t just manage properties: we guide our investor clients from A to Z, with a global, rigorous, and profitability-focused approach.
Whether it’s :
Tax declarations (VAT, IRS, business activity registers),
Choosing the most advantageous regime (exemption or standard regime),
Recovering VAT on your expenses,
Or simply optimising your profitability and securing your legal compliance…
Our team handles it all for you, in collaboration with our partner accounting and tax firm, specialised in Alojamento Local.
We also provide :
Personalised profitability simulators,
Contract templates compliant with current legislation,
Proactive accounting and administrative monitoring,
Fully managed rental operations,
Client portal and accounting cloud access.
The result ? You stay focused on your goals while we handle the rest.
Airnest REIM — your trusted partner for secure and profitable investment in Portugal.
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