Will the Tourist Tax in Funchal Increase in 2026? What Hosts Need to Know
If you run a short-term rental in Funchal, you've been collecting €2 per guest per night since October 2024. But in January 2026, Funchal's council made a decision that could change that figure — and most hosts missed it entirely.
The short answer: a rise is possible, but not confirmed, and it won't happen overnight. The longer answer is more useful, because it tells you the real timeline, what the council actually decided, and what you should be doing right now to stay ahead of any change.
Quick solution : use EazyAL software to simplify Tourist Tax
What Funchal's Council Decided in January 2026
On 8 January 2026, the Funchal Municipal Council voted unanimously to begin a formal review of the municipal tourist tax regulation — the legal document that sets the rate, exemptions, and collection rules.
The council president confirmed publicly that raising the current €2 per night rate "is a possibility," without committing to a specific new figure. The JPP party, which backed the review, argued that revenue from the tax should be reinvested directly into the city.
What the council did not do was announce a new rate or a start date. The review process has multiple mandatory stages before any change can be applied to hosts or guests.
How Long Will the Review Process Take?
According to the Funchal council president himself, updating the regulation is expected to take six to nine months. The process requires:
Internal drafting of a revised regulation proposal
Public consultation — any citizen or business can formally submit comments
Approval by the Municipal Council (Câmara)
Approval by the Municipal Assembly (Assembleia Municipal)
Even if the process started in January 2026, any new rate is unlikely to come into force before the second half of 2026 at the earliest — and realistically could slip into 2027.
How Does the Funchal Tourist Tax Work Right Now?
Before looking at what might change, here are the current rules in full:
Detail | Current value |
|---|---|
Rate per person per night | €2.00 |
Maximum nights charged per stay | 7 nights |
Exemption by age | Children aged 12 and under |
Exemption for disability | Disability rating of 60% or above |
Start date (hotels and short-term rentals) | 1 October 2024 |
Cruise passenger levy | €2.00 per passenger (since 1 January 2025) |
Official submission portal | taxaturistica.funchal.pt |
The tax applies to all tourist accommodation in the municipality, including hotels, rural tourism properties, and short-term rentals registered with RNAL.
How Much Does the Tourist Tax Earn Funchal?
The numbers explain exactly why the council is looking at this closely.
For 2026, Funchal expects to collect around €14 million from the tourist tax — the same figure recorded in 2025. That amount represents approximately 21% of the municipality's total revenue. It's a significant income stream, and pressure to increase the rate is growing because the municipality wants to fund infrastructure without relying solely on local taxpayers.
What This Means for Your Short-Term Rental
You keep charging €2 per night — for now
Nothing changes in your day-to-day operation while the new regulation is still being drafted. The €2 rate remains in force until a new regulation is officially published. Any official change will be announced in advance by the council.
Think through your pricing for different scenarios
If the rate rises to €3 or €4 per night, that's still a cost passed on to guests — not to you directly. But it can affect how your total price looks on Airbnb or Booking.com. A 7-night stay at €4 per night adds €28 per adult in tourist tax. For two guests, that's €56 appearing at checkout — a number that starts to feel visible.
It's worth thinking now about whether you'd absorb any psychological pricing effect in your base rate, or communicate it clearly in your listing.
Watch for the public consultation window
When the revised regulation goes out for public consultation, you have the right to comment as a short-term rental owner. The council must publish the document and open a formal response period. Keep an eye on funchal.pt for announcements — this is a moment most hosts don't realise they can participate in.
How to Collect and Submit the Tourist Tax in Funchal: Step by Step
If you're still getting to grips with the current process, here's a clear rundown:
Step 1 — Collect the tax from your guest Charge €2 per adult per night, up to 7 nights, at check-in or as part of the booking. You can include it in the total price or itemise it separately — both approaches are valid as long as it's clearly stated.
Step 2 — Apply exemptions correctly Children aged 12 and under are exempt. Guests with a certified disability of 60% or above are also exempt, on presentation of documentation. You don't need to verify this proactively — just apply it if the guest presents the relevant paperwork.
Step 3 — Declare and pay via the official portal Go to taxaturistica.funchal.pt to submit your declaration and pay within the deadlines set by the municipality. Make sure your account credentials are active — this is one of the most commonly overlooked obligations.
Step 4 — Keep records of every collection In the event of an inspection, you'll need to show that you collected and submitted the correct amounts. Keep records per stay and per tax period.
Madeira Is Expanding Tourist Taxes Across the Board
Funchal isn't acting in isolation. The autonomous region of Madeira has been systematically introducing new tourist levies:
Overnight stay tax: applied across all municipalities on the island, with rates varying by council
Cruise passenger levy: €2 per passenger in Funchal (since January 2025)
Trail and levada access fees: already in force on several routes, including Ponta de São Lourenço
Vehicle rental tax: still under discussion, with a figure of €2 per day proposed
This broader context makes clear that the Funchal tourist tax review is part of a deliberate regional strategy — not a one-off move. Hosts across Madeira should expect this landscape to keep evolving.
Frequently Asked Questions: Tourist Tax in Funchal
Will the Funchal tourist tax actually increase in 2026? Possibly, but it hasn't been confirmed. In January 2026, the council voted unanimously to start reviewing the regulation and the council president said an increase "is a possibility." Given the six-to-nine-month review timeline, any new rate is unlikely before late 2026 or 2027.
What is the current tourist tax rate in Funchal? €2 per person per night, for a maximum of 7 nights per stay. It's been in force for hotels and short-term rentals since 1 October 2024, and for cruise passengers since 1 January 2025.
Who is exempt from the Funchal tourist tax? Children aged 12 and under, and guests with a certified disability rating of 60% or above.
Is there a tourist tax in Funchal Madeira? Yes. Since October 2024, all hotels and registered short-term rentals (alojamento local) in Funchal must collect €2 per adult per night, up to a maximum of 7 nights.
How do hosts submit the tourist tax in Funchal? Via the official portal at taxaturistica.funchal.pt, where you declare the amounts collected and pay within the municipality's deadlines.
Is the tourist tax paid by the guest or the host? The guest pays it, but the host is responsible for collecting it and submitting it to the municipality. If you fail to collect or declare it correctly, the liability falls on you.
How much does Funchal collect from the tourist tax? Around €14 million per year — approximately 21% of the municipality's total annual revenue, based on 2025 and 2026 projections.
What happens if I don't collect or declare the tourist tax? Non-compliance can result in fines and may create complications when renewing your short-term rental registration with the local council.
Three Things to Do Right Now
You don't need to change anything today — but here's what smart hosts are doing while the review plays out:
Check that your taxaturistica.funchal.pt access is active and that you're submitting declarations on time. It's the easiest compliance obligation to let slip, and one of the first things an inspection will look at. Read more here
Sign up for updates from Funchal council at funchal.pt so you're notified when the revised regulation goes out for public consultation. You'll have a window to formally respond.
Model two or three pricing scenarios based on possible new rates — €3, €4, or higher — so you're not making hasty decisions the week the change is announced.
If you manage more than one property, or if you're still tracking and submitting tourist tax manually, eazyal handles the collection, calculation, and record-keeping automatically for Funchal hosts. When the rate changes, it updates without you having to touch anything.
Last updated: May 2026. Sources: Funchal Municipal Council, DNoticias, Observador, Jornal da Madeira, Madeira Island News Blog.
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