Portugal New Short-Term Rental Regulations – Restriction Lift
Portugal lifts short-term rental restrictions and changes its regulations
On 23 October 2024, the Decree-Law No. 76/2024 was published in the Diário da República, lifting the restrictions from the Mais Habitação programme and implementing the changes introduced by the “Construir Portugal” programme.
For short-term rental (alojamento local, AL) owners, the new law not only removes controversial measures like the non-transferability of licences, licence expiration, and the total ban on new licences in coastal areas, but also gives less control to condominiums to restrict or cancel AL licences in residential buildings and even changes the maximum guest capacity allowed in each AL.
In this article, we’ll break down all the changes coming to AL legislation starting 1 November, in plain language, and highlight areas that still need further clarification from the government, local councils, or other authorities. When more details are available, we’ll update this guide so you always have the most complete and current info on AL regulations—free and in clear language—for all alojamento local investors, owners and operators.
NOVEMBER – Update: Lisbon and Porto have already suspended new licences in each of their historical downtown area for a 6-month period until their new local legislation is approved.
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The scope of the new AL law
According to the decree-law, this regulation “[a]mends the legal framework for the operation of local accommodation establishments” and “revokes housing-related measures” based on the public policies for housing and tourism presented in the “Construir Portugal” programme. The goal of these policies is to “approve and implement short-term measures that boost housing supply, increase trust in the rental market, promote youth housing, and ensure better housing affordability.”
For local accommodation, the new law gives municipalities more authority to decide how AL licences are issued, regulated, and monitored. This includes setting up their own rules and procedures.
In simple terms, this law is rolling back the national-level restrictions from Mais Habitação and putting the power back into the hands of local councils, allowing them to adapt the rules to the specific needs of their areas.
What’s changing for short-term rental (AL) owners
Returning AL regulatory decisions to municipalities
With this new law, local councils (municípios) can create their own “administrative regulations” to manage AL activity in their area, instead of being bound by national rules. This means they can once again define containment zones and sustainable growth areas based on their local needs.
Municipalities with more than 1,000 registered ALs must decide within a year whether to create regulations when they reach this number. If a municipality already has over 1,000 ALs at the time the law is passed, they can suspend new licences for one year while they develop these regulations (we explain this a little bit more further down).
Municipalities reaching this 1,000 ALs threshold may also appoint an “alojamento local representative” to assist with managing the activity, handling complaints, making recommendations, and issuing “best practice guides” for ALs. This figure will work alongside “residents,” AL owners, “condominiums,” and other relevant parties to fulfil their duties.
(Article 4 and Article 15-A)
New Containment and Sustainable Growth Areas
Municipalities can now impose limits on the number of new ALs registered in parishes (freguesias) or parts of parishes through their local regulations, which will be based on “local housing and environmental pressure.”
For now, these restrictions aren’t in place yet, so if you’re considering applying for your AL licence, now’s the time.
Calculate the potential income from your property and secure your licence before the council introduces new restrictions or suspends licences.
Containment Areas
Containment areas will be areas where there’s an “overconcentration of ALs,” requiring stricter rules for new licences.
In these zones, councils can:
- Block new licences for properties that were rented out for housing in the past 2 years;
- Set limits on the number of ALs in relation to the total number of homes;
- Define exceptions that allow new ALs in these areas;
- Set conditions and restrictions for new licences, such as limited licence durations and stricter rules once again;
- Limit licence transferability, as long as it doesn’t affect personal rights in regards to inheritance, transfers between spouses, or division of property after a divorce.
Sustainable Growth Areas
Sustainable growth areas will be those where “monitoring is needed” to prevent overconcentration of ALs and their negative impact on neighbourhoods. In these areas, councils can introduce extra requirements for new ALs, such as:
- Not allowing new ALs in properties that have been rented for housing in the past 2 years;
- Requiring AL properties to have an official conservation status of “medium” or higher, verified by a council inspection;
- Limiting licences to properties with an energy efficiency rating of D or better, certified by an energy certificate;
- Limiting licence issuance to ensure a specific balance between the number of ALs and housing units in residential buildings;
- Considering exceptions for properties built before 1951.
Both types of areas must be reassessed at least every 3 years, and the decisions the council makes will need to be shared with Turismo de Portugal.
This is a major shift from the Mais Habitação programme, which had imposed blanket restrictions on new ALs in municipalities with “housing shortages” in any part of their territory, regardless of the specific local context of each parish (freguesia).
Remember, until new local regulations are in place, councils can suspend new licences for up to a year in certain areas while they finalise their rules for local accommodation.
(Articles 15-A, 15-B, 15-C)
Get your AL licence before new municipal regulations take effect
AL licence transferability
Under Mais Habitação, AL licences were non-transferable, except through inheritance, meaning they couldn’t be transferred over, even in situations where the licence was held by a company that was being sold.
This rule has now been scrapped, so AL licences are once again transferable, whether the owner is an individual or a company.
However, as mentioned earlier, municipalities may impose their own restrictions on licence transfers, so now is the best time to apply for your licence or buy a property with an existing AL licence.
Contact us and we can help you understand what steps you can take to ensure your property remains profitable for years to come.
(Article 7)
AL licence duration
Mais Habitação had introduced a five-year expiration date for AL licences, requiring renewal after that period.
This article (Article 6-A) has been repealed, meaning AL licences no longer expire, and there’s no need for renewals.
However, councils could still introduce their own regulations for future licences, so keep that in mind if you chose to request a licence subject to future local regulations.
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The process of applying for new AL licences
The process for applying for an AL licence still requires a “notificação prévia”, or prior notification, to be sent to the Council Mayor via the e-balcão system (here’s a step-by-step guide – clicking here opens a PDF file).
The procedure is still mandatory, but some documents that were previously required under Mais Habitação are no longer needed, and a few steps have been updated, particularly regarding deadlines.
(Article 6)
No more seasonality declaration
Previously, owners of AL units registered in their main residence had to declare a seasonality period to specify when the property would be used as AL versus personal residence. This requirement has been removed, and you no longer need to provide this info.
No need for condominium approval for new AL installations
Under Mais Habitação, you needed a declaration from the condominium to authorise the opening of an AL in buildings with horizontal ownership (i.e., flats in apartment blocks, where each unit is individually registered as a single property).
This requirement has been scrapped, so you no longer need condominium approval to set up an AL in a residential building.
Now, the only required documents for getting an AL licence via the “notificação prévia” process are related to the property, the activity, and the owners/managers: Property Booklet, Start of Activity Declaration, proof of property insurance, and owner/manager documents.
However, if you’re opening a hostel in a building with horizontal ownership, you’ll still need condominium approval. And if the condominium has its own building rules prohibiting new ALs, you won’t be able to open one.
Plus, if your AL causes regular disturbances, other residents can file a complaint with the council, which may lead to the licence being revoked (more on this in the licence cancellation section below).
Extended response time for prior notification
Council response times for AL licence requests, or “notificação prévia”, or “prior notification” requests, have been extended from 10 to up to 60 days for regular applications, and up to 90 days for applications in containment areas.
Appealing a rejected application
At any point, if your application is rejected, you can request a review of this decision, but only once. Additionally, you’ll also need to cover the costs of this review and the council inspection that will take place to verify the AL.
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Longer inspection periods for AL openings
Just as the response time for prior notification has been extended from 10 to 60 days (or 90 in containment areas), the period of time the city council has to schedule the mandatoryinspection to the AL to allow you to start welcoming guests has also been increased from 30 to 60 or 90 days, depending on if the AL is located on a containment area or not.
(Article 8)
AL licence cancellations
AL licences can still be cancelled for the same reasons as before, like non-compliance with registration documents, or if the AL is wrongly set up in a containment area, or if safety, capacity, or advertising rules aren’t followed (Articles 11 to 17).
But there are now new reasons for licence cancellation.
First, a licence can be cancelled if an AL is being opened in a property that was rented out for permanent housing in the past two years, if the property is located in a containment area and the council regulation restricts properties from being moved from long-term housing to short-term renting.
AL licences may also be cancelled if there’s no valid insurance. The insurance details will start to be publicly available on the Turismo de Portugal website, and councils can start to request proof of insurance at any time, which will need to be provided by the licence holder within 3 days to avoid cancellation.
If an AL disrupts the normal use of a building, such as preventing neighbours from sleeping or causing disturbances, a request to cancel the licence can be filed with the council.
Condominiums can also request licence cancellations for the same reasons, as long as at least half of the neighbours oppose the AL (under Mais Habitação, only one-third of owners was needed, and the cancellation was immediate with no grounds for appeal).
In both cases when complaints are made, the council AL representative now has 60 days to decide to start a process to achieve an agreement between the AL and the other parties with new conditions or agreements on how the AL should regulate its activity to preserve the well-being of all residents of the building, to try and resolve the situation before immediately cancelling the licence.
Public information about ALs
Turismo de Portugal already provided public information about active ALs, including the name, capacity, and owner details of each unit. But now they’ll also include insurance expiry dates.
Sharing contact details with the condominium
AL managers were already required to provide a phone contact to the condominium. Now, they must also provide their email address.
Maximum AL capacity
Previously, ALs in “hospitality establishments”, specific ALs in designated larger units, could host a maximum of 30 guests in 9 rooms.
In general, all ALs could host up to 2 adults per bedroom, plus 2 adults in the living room if the necessary conditions (beds, ventilation, etc.) were met. It was also possible to add up to 2 extra beds for children under 12.
The new law lowers the maximum capacity to 27 guests for all types of ALs, while maintaining the 2-person-per-room limit. However, now convertible/extra beds (for adults as well as children) can be added, but they can’t exceed 50% of the fixed beds.
What’s still unclear?
Further clarification is expected on what counts as a “fixed bed” versus a “convertible bed,” which may affect the maximum guest capacity for existing AL properties.
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Summary of the AL legislation changes
Here’s a quick recap of the main changes to AL regulations:
- No more licence expiration: AL licences will no longer expire after five years—they’re now permanent.
- Licence transferability: AL licences are once again transferable, as are companies holding AL registrations.
- Less condominium control: You no longer need condominium approval to apply for an AL licence, though you still need to follow the building’s regulations. These regulations can still prohibit new ALs.
- AL licences are available again: The near-total ban on new licences under Mais Habitação has been lifted, giving councils control over new licences based on local housing needs.
However, note that councils may still introduce regulations that bring back some of the restrictions that have just been repealed, like licence expiration or transfer limits.
The best time to apply for your AL licence is now
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