The Complete 2026 Guide to the Alojamento Local (AL) License in Portugal

This guide replaces and updates our previous 2025 version to reflect all legal and municipal changes applicable in 2026

What is the Alojamento Local License ?

The Alojamento Local (AL) license is the official registration required to legally operate tourist accommodation in Portugal. It applies to all property owners—individuals or companies—who rent furnished properties on a short-term basis to visitors, typically for stays of less than 30 days. In other words, your apartment, house, or guest room must be registered as AL whenever you offer it as a seasonal rental for payment, provided it does not fall under the more complex categories of hotels or formal tourist establishments.

What is the purpose of the AL license ?

Its goal is to regulate the vacation rental sector (Airbnb, Booking, etc.) by ensuring compliance with safety, hygiene, and tax standards. Obtaining an AL registration number (issued by the local municipality through the national tourism registry) is mandatory to legally operate short-term rentals. This license also provides transparency for travelers—through the display of the registration number on listings—and enables authorities to verify that the property meets minimum requirements (equipment, safety, insurance, etc.). In short, any person—foreign investor, Portuguese homeowner, or real estate professional—wishing to rent a furnished property to tourists must hold an AL license.

Who is affected ?

The vast majority of temporary accommodations fall under this requirement: city apartments, villas and holiday homes, guesthouse rooms (B&B), and even hostels. There are several AL categories (apartment, standalone house, guest rooms, dormitory accommodation, etc.), each with its own specific requirements, which we detail later. Conversely, long-term rentals (standard leases over 30 days) or accommodations offered without financial compensation do not fall under the AL regime.

Note : Before starting any application, ensure that your property has a valid licença de utilização (usage license)—the urban compliance certificate issued by the municipality confirming that the property is approved for residential use. Without this document (for example, if a commercial space was converted into housing without authorization), it will be impossible to register for an AL license.

Key Changes from 2025 to 2026

While the national Alojamento Local (AL) legal framework introduced in early 2025 remains largely unchanged, the most significant developments in 2026 stem from municipal implementation and operational enforcement.

The key changes to be aware of are:

• Stricter and more granular municipal containment zoning, particularly in Lisbon and Porto, now based on defined AL density thresholds (5% and 10%) and applied at both freguesia and neighborhood (bairro) level.

• License transferability clarified but locally constrained: although AL licenses are transferable under national law, several municipalities now restrict or neutralize transfers in containment zones, meaning a sale may trigger license expiry unless protected exceptions apply.

• Change of immigration reporting authority: declarations of foreign guest stays are now handled through the SIBA platform under the authority of AIMA, following the dissolution of SEF.

• Increased enforcement and operational scrutiny, with municipalities focusing more heavily on insurance compliance, nuisance control, and the removal of inactive (“ghost”) AL registrations.

• No major national tax or capacity reforms, but higher municipal tourist taxes are now firmly in place in key destinations (e.g. Lisbon and Porto), reinforcing the importance of local compliance.

The remainder of this guide provides a detailed overview of the AL regime as applicable in 2026, combining national law with the latest municipal regulations and their practical implications for owners and investors.

Legislative updates effective 1 January 2025

The legal framework for Alojamento Local has undergone significant changes following the housing crisis and a series of reforms. Since November 1, 2024 (with practical effects starting January 1, 2025), a new decree-law (n.º 76/2024) has come into force, deeply overhauling AL regulations. The stated goal is to strike a balance between the growth of tourism and the protection of the housing stock for residents.

Here are the key changes to be aware of in 2025 :

• Resumption of New AL Licenses (End of National Freeze) – The government has revoked the provision that suspended the issuance of new Alojamento Local licenses nationwide (a measure introduced in 2023 under the “Mais Habitação” program). In other words, as of early 2025, it is once again possible to apply for an AL license anywhere in Portugal, subject to the local restrictions outlined below. The previous rule requiring licenses to expire and be renewed every five years has also been abolished. AL licenses are now granted for an indefinite period (no more automatic expiry in 2030 as set out in the former law).

• Increased Powers for Municipalities – The management of AL authorizations is now decentralized. Each municipality may set its own rules through a municipal regulation. In particular, they may define “contention zones” (areas under heavy tourist pressure where new registrations are restricted) and “sustainable growth zones” (areas where new licenses remain possible but subject to certain conditions, e.g., energy requirements or primary residence quotas). In practice, this means that new AL license applications are once again accepted nationwide, except in zones that each municipality decides to block. Lisbon, for example, has immediately exercised this power (see city-by-city section). Municipalities may also appoint a “Provedor do Alojamento Local” (local accommodation ombudsman) responsible for resolving neighborhood disputes and promoting best practices in the sector.

• Easier License Transfer – The non-transferability rule (which meant that an AL license automatically expired if the property was sold or changed ownership) has been abolished nationwide. Now, if you sell your property or transfer it to a company, the new owner can retain the existing AL license without reapplying. This greatly reassures investors, as the value of an AL property is no longer threatened by automatic expiry upon sale. Exception: in contention zones defined by municipalities, there may be restrictions on transfers (e.g., some cities wish to prevent a property used as a long-term rental over the past two years from being converted into AL in a saturated area). However, these local restrictions exclude force majeure cases (inheritance, divorce, family transfer, etc.).

• Condominium Rules: Controlled Right to Object – Previously, condominium owners in a building had little ability to oppose an AL (except by unanimous assembly resolution). The new law clarifies that prior authorization from the condominium board is no longer required to register an AL within a co-owned property. However, the condominium retains the right to object after the fact if there are proven and repeated nuisances disturbing neighbors. In such a case, a vote representing more than 50% of ownership shares is required to request the cancellation of the license. The final decision lies with the municipality, which may suspend or revoke the license for up to five years in cases of abuse. Note: a condominium may still, upon creation or by amending its regulations, ban tourist rentals in the building altogether, but this requires a reinforced two-thirds vote and only applies to future AL registrations (existing licenses remain valid).

• Reduced Capacity Limits – A standard AL property remains limited to a maximum of nine bedrooms, but the total number of guests allowed has been reduced from 30 to 27 simultaneous occupants. This cap applies per housing unit. For example, a large five-bedroom villa may accommodate 10 people (5x2) plus possibly 2 on a sofa bed — a total of 12, well below the threshold of 27. In practice, few apartments exceed these limits, but this clarification mainly targets large hostels. The law also confirms the possibility of adding convertible extra beds (sofa beds, cribs, etc.) as long as they do not exceed 50% of the fixed-bed capacity. For instance, a studio AL designed for two people may host an additional child on a folding bed.

• Other Key Points – The grounds for license withdrawal have been expanded and clarified: lack of mandatory insurance, non-compliance with municipal regulations, repeated nuisances, etc., can lead the municipality to cancel an existing AL license. Furthermore, the registration process has changed: the comunicação prévia (online application) remains the standard route to obtain a license, but the period during which authorities may object or request an inspection has been extended from 10 days to 60 days (or 90 days in a contention zone). If there is no objection within this period, the license is deemed approved. Municipalities and ASAE (the Economic and Food Safety Authority) are now solely responsible for inspections, with Juntas de Freguesia (parish councils) no longer involved.

In summary – Since January 2025, regulations have been relaxed at the national level (resumption of new licenses, perpetual and transferable licenses, clearer condominium rules) while strengthening the ability of cities to impose local restrictions. It is therefore crucial to stay informed of the municipal rules in the city where your property is located (see city-by-city section below). Overall, these changes have been welcomed by tourism industry stakeholders, who feared a massive expiry of AL licenses in 2030. The Local Accommodation Association (ALEP) even stated that the sector “came close to losing a significant portion of its AL supply” in 2023 before the new government’s late-2024 reversal.

License Transfer and Local Restrictions (2026)

One of the most important practical changes introduced by the 2024 national reform (Decree-Law n.º 76/2024) is the transferability of Alojamento Local (AL) registrations. Under national law, an AL license no longer automatically expires upon sale or change of ownership, as was previously the case. In principle, an existing AL registration can therefore transfer to the buyer without requiring a new application.

However, in 2026 the effective transferability of an AL license largely depends on municipal regulations, particularly in cities that have adopted containment zoning, such as Lisbon, Porto, Sintra, and Vila Nova de Gaia.

(1) At national level, the rules are clear:

• An AL registration is not automatically terminated by a sale, transfer to a company, or change of ownership.

• The law preserves transferability as a general principle and explicitly protects certain transfers, notably inheritance, divorce, and family reorganization.

(2) Local Overrides in Containment Zones

While the national principle applies, municipalities may restrict how transferability operates in practice within contention zones (areas under high housing pressure):

• Lisbon: In many absolute and relative containment zones, an AL license may expire upon sale, unless the transfer falls within a protected category (such as inheritance) or specific municipal conditions are met. In these areas, the municipality may require a new registration rather than automatic continuation, in order to limit speculative transfers and manage housing supply.

• Porto: Transferability is generally maintained, but in the most saturated areas—particularly the historic core and Bonfim—the municipality may apply additional scrutiny or require confirmation that the transfer complies with local planning objectives.

(3) Practical Guidance for Investors

• Check municipal rules first: Always verify how the local municipality treats AL transfers in the specific zone and address concerned.

• Protected transfers: Transfers linked to inheritance or family restructuring are safeguarded by national law, even in contention zones, but should still be verified locally.

• Impact on value: Where transferability is restricted, the market value of an AL property may be affected, as the buyer could face reapplication, delays, or additional conditions.

• Due diligence: Whenever possible, obtain written clarification from the municipality on how the transfer will be handled for the specific property.

In conclusion, Transferability is no longer a theoretical issue. Local transfer rules are now embedded in municipal containment policies, meaning that the value and viability of an AL license depend not only on national law, but also on local implementation. A poorly informed acquisition in a contention zone may result in an AL that cannot legally continue operating after the sale.

Preliminary Transfer & License Feasibility Analysis (Airnest REIM)

Given the growing complexity of AL transfer rules in 2026, a preliminary legal and regulatory analysis is now essential before acquiring or transferring an AL property.

Airnest REIM provides a structured pre-acquisition and pre-transfer assessment, designed to determine:

• whether an existing AL license can be validly transferred,

• whether a new AL registration remains admissible for a specific property,

• whether the property is located in an absolute or relative contention zone, including at bairro level,

• whether municipal exceptions or temporary regimes may apply,

• and whether alternative operating models (e.g. mid-term rental) are legally viable.

This analysis is carried out prior to completion of the transaction, in coordination with municipalities, legal advisors, and tax professionals where required. Its purpose is to secure the investor’s position, avoid post-acquisition surprises, and accurately assess the real regulatory and market value of an AL asset. In a regulatory environment where local rules increasingly prevail over national principles, such due diligence has become a core element of any serious AL investment strategy in Portugal.

Requirements to Obtain or Maintain an AL License

Administrative Procedures and Registration –

To obtain the license, an online registration process is required. The owner (or their representative) must submit a “comunicação prévia” through the Balcão Único Eletrónico (ePortugal portal) or directly to the relevant municipality. This submission must include all details of the property (address, type, capacity, owner’s tax number, etc.) as well as a sworn declaration confirming that all legal criteria are met.

• Processing Time – Once the comunicação prévia is submitted, the AL license is generally issued immediately with a provisional number, allowing you to start operations. However, the municipality has 60 days (or 90 days in restricted zones) to verify the property’s compliance and potentially oppose or require corrections. After this period, if no notice is given, the license becomes definitively valid. During this time, the municipality may carry out an on-site inspection (checking safety equipment, habitability, etc.)—a step now more common in major cities.

  
  

• Fees – Applying for an AL license is free in most municipalities. However, some may charge a small administrative fee or file opening cost (varies). In addition, obtaining certain required technical certificates—such as an electrical or gas compliance certificate—may involve costs (inspection by a certified technician).

  
  

• Required Documents – Typically: a copy of the property title or lease contract (note: under Portuguese law, a tenant can only register an AL with the landlord’s written consent), the housing use permit (licença de utilização with uso habitacional), and proof of insurance. If the property is in a condominium, prior authorization from the owners’ assembly was previously mandatory, but is no longer explicitly required under national law (except for opening a hostel in a residential building, which still requires co-owners’ approval). That said, some cities or buildings may have internal rules, so it is wise to inform the condominium board to avoid later disputes.

  
  

• Tax Registration – In parallel, the owner must ensure tax compliance. A short-term rental business is considered a commercial activity (hospitality services) under Category B of IRS (professional income). If not already done, the start of activity must be declared to the Finanças (tax authority), choosing the tax regime (simplified or organized accounting—see Taxation section) and the activity code (usually CAE 55201). Failing to open this tax file may result in fines in the event of an audit.

Once the AL license is granted, a unique registration number (format: XXXXX/AL) is assigned. This number must appear in all advertisements and platforms where the property is listed, under penalty of a fine. In addition, an official “AL” plaque, compliant with Portaria 262/2020 (usually a 20 cm square with the AL logo), must be displayed at the entrance of the property—making the activity visible to both neighbors and authorities.

Safety and Habitability Standards

One of the main purposes of the AL license is to ensure that the accommodation offers a minimum level of comfort and safety for guests. Several technical requirements must be met before registration (and may be checked during a municipal inspection) :

• General Habitability – The property must meet basic standards for decent housing. It must be connected to potable water and sewage systems (or have a compliant autonomous system), provide a constant supply of hot and cold running water, have an electrical installation in compliance with current standards and adequate lighting, as well as a heating/air conditioning system suited to the local climate (heating in winter in the north, air conditioning or fans in the south, for example). All equipment and installations must be in good working order and properly maintained—a degraded or unsanitary property will not be accepted.

  
  

• Windows and Ventilation – Each room used for sleeping must have at least one window or French door that opens to the outside, providing sufficient natural ventilation and light. Windows must also be fitted with coverings (curtains or shutters) to block light and ensure guests’ privacy. In buildings without elevators, ensure exits present no hazards (e.g., secure window railings).

  
  

• Capacity and Furnishings – As noted earlier, an AL property is limited to 9 bedrooms and 27 guests. Each bedroom must measure at least 6.5 m² (single) or 9 m² (double), have the legal minimum ceiling height, and be fitted with a door and secure lock (to guarantee safety and privacy). The accommodation must have furniture and equipment suitable for the number of guests: sufficient standard-sized beds (approx. 90 × 190 cm for a single bed), bed linen and towels, storage space for personal belongings, tables and chairs, lighting, etc. In the case of an apartment or house, a basic equipped kitchen is required (stovetop, refrigerator, and minimum utensils to prepare a simple meal).

  
  

• Sanitary Facilities – There must be at least one full bathroom for every 4 bedrooms or 10 guests. Each bathroom (private or shared) must include at least a toilet, washbasin, and shower or bathtub in good working condition, with hot water available at all times. If shared among multiple guests, cleanliness must be ensured with very regular cleaning (hostels must provide daily cleaning of shared bathrooms). For dormitory-style accommodations (hostels), the law requires gender-separated facilities above a certain capacity, or alternatively individual lockable cubicles/toilets to guarantee privacy.

  
  

• Fire Safety and First Aid – Every AL property, even small ones, must have a fire extinguisher (size adapted to the property—generally 6 kg for an apartment) and a fire blanket near the kitchen. A smoke detector is not explicitly required by law, but is strongly recommended by the fire department (and by us!) for guest safety. A well-stocked first aid kit must be available, along with a visible display of the European emergency number (112) and local emergency contacts (hospital, police). For small units (under 10 guests), these items are sufficient. Larger units (≥10 guests, typically hostels or large villas) must comply with additional requirements: posted evacuation plans, emergency lighting, clearly marked emergency exits, and, where required, a fire alarm system and automatic smoke detectors in accordance with the Technical Fire Safety Regulations (Decreto-Lei No. 220/2008 and Portaria No. 1532/2008).

  
  

• Other Requirements – The property must have a secure locking system at the main entrance (solid entrance door with quality lock). Any gas installations (water heaters, cookers) must be compliant and maintained—an official gas compliance certificate may be required. The same applies to electricity in older properties—a compliance certificate from a licensed electrician may be requested to prove no major defects. Finally, cleanliness and hygiene are essential: between stays, the property must be fully cleaned and all bed linen/towels replaced. A cleaning log is not mandatory, but in practice, platforms and guests monitor this closely through reviews.
  
  

  Good to Know : To maximize safety, it is advisable to provide guests with a small welcome guide reminding them of key rules (e.g., no smoking, how to turn off the gas, evacuation plan). In addition, investing in a few smoke detectors (€15–20 each) and a gas detector if you have a gas installation can prevent accidents and demonstrate your professionalism—even if not explicitly required by law. Posting a simplified evacuation plan behind each bedroom door is another low-cost, professional measure that could save lives.

Insurance and Civil Liability

Since 2021, and as reaffirmed by the 2024 legislative reform, civil liability insurance is mandatory for all Alojamento Local operators. This insurance must cover damages arising from the exercise of the AL activity, including bodily injury and property damage suffered by guests or third parties (for example, accidents inside the property, fire damage affecting the building, or other incidents linked to the accommodation activity). In practice, most Portuguese insurers offer dedicated multi-risk policies for short-term rental or non-occupying landlords, specifically tailored to AL operations. At a minimum, the policy must provide adequate civil liability coverage directly linked to tourist accommodation activity.

During inspections, municipalities routinely require proof that the insurance is valid, active, and properly registered. Failure to maintain or present compliant insurance coverage may result in the suspension or cancellation of the AL registration, even if the property otherwise meets technical requirements.

Airnest REIM can assist property owners with the subscription of a compliant Alojamento Local civil liability insurance, through its partner Allianz Portugal, ensuring that coverage meets current legal and municipal requirements.

Taxation of AL Activity: VAT, Income Tax, and Fiscal Regime

Operating a Local Accommodation (AL) property in Portugal entails specific tax obligations, both in terms of VAT (IVA) and income tax, depending on the operator’s turnover and ownership structure.

VAT : Rates and Exemptions

Local Accommodation (AL) rentals in Portugal are subject to VAT, as they are considered a tourism accommodation service (similar to hotels). The applicable rate is the reduced 6% VAT on the nightly rate (instead of the standard 23%), in accordance with Portuguese tax law applicable to hospitality activities.

However, many small owners may benefit from a VAT exemption: if your annual AL turnover does not exceed €18,500 (Article 53 of the CIVA – IVA Exoneração), you may opt for this exemption regime. In this case, you do not charge VAT to your guests (0% VAT) and, in return, you cannot recover VAT on your expenses. This regime avoids the administrative burden of filing periodic VAT returns.

• If exempt (turnover ≤ €18,500): you charge €1,000, collect €1,000, and owe no VAT. All VAT paid on purchases (furniture, linen, repairs) remains at your expense.

• If subject to VAT (turnover > threshold): your prices must include 6% VAT. For a €1,000 weekly rate, you are effectively receiving €943.40 net + €56.60 VAT, which you remit to the tax authorities.

Example: If you buy equipment with 23% VAT (e.g., €20,000 in renovation work = €4,600 VAT), a VAT-registered operator can recover this VAT, offsetting the VAT collected on bookings.

• In the VAT regime, you must file quarterly (or monthly for high turnover) returns and remit the net VAT due. The benefit is that you can reclaim the 23% VAT on all professional expenses (furniture, renovations, management fees, platform commissions), which can outweigh the 6% VAT charged to guests once your business reaches a certain scale.

💡 Note : Tax rules may change and individual situations vary. Airnest REIM handles all these fiscal and administrative aspects with its partner accounting and tax advisory firm, ensuring compliance, tailored optimization, and complete peace of mind.

Important: non-resident operators

Non-resident AL operators are required to register for VAT from the first euro of income. Even if annual turnover is below €18,500:

• The VAT exemption under Article 53 does NOT apply to non-residents,

• Non-resident owners must register for IVA, charge 6% VAT, and file VAT returns,

• Appointment of a fiscal representative in Portugal may be required (depending on EU / non-EU status).

Income and Tax: Simplified Regime vs. Real Regime

Income generated from operating a Local Accommodation (AL) is taxable under IRS (personal income tax) or IRC (corporate income tax), depending on your ownership structure. Most private individuals choose the simplified regime under their own name (IRS Category B), as it offers advantageous flat-rate deductions and avoids the need for full bookkeeping.

(1) Simplified Regime (Recibo Verde – Individual activity)

Under this regime, you are not taxed on actual profit, but on a fixed percentage of your gross revenue. For standard AL rentals (apartment or house), only 35% of gross income is considered taxable. In other words, 65% of revenue is automatically treated as expenses (maintenance, depreciation, fees, etc.) by the tax authorities, without the need to justify them. This percentage drops to 15% for guesthouses or hostels, as these are considered more costly to operate.

If the property is located in a designated containment zone (zona de contenção urbana), an additional 15 percentage points apply. For example, an AL apartment in a high-pressure area (e.g., central Lisbon) will be taxed on 50% of revenue (35% + 15%).

In short :

• Outside a containment zone → IRS applies to 35% of turnover.

• Inside a containment zone → IRS applies to 50% of turnover.

If annual income exceeds €27,360, an additional 15% taxable coefficient may apply unless you can provide proof of sufficient expenses. In practice, this is usually avoided by keeping invoices for utilities, cleaning, and other operating costs.

(2) Real Regime (Company – Organized accounting)

Under contabilidade organizada, tax is levied on actual net profit (income minus expenses).

Key characteristics:

• Full accounting is mandatory

• A certified accountant is required

• All income, expenses, depreciation, and financing costs are recorded

In practice, companies are automatically subject to the real regime and taxed under Corporate Income Tax (IRC) at 21%, plus applicable municipal surcharges.

Other Local Taxes

Do not forget property tax (IMI): a property operating under AL remains subject to IMI like any other real estate asset. The rate varies depending on the municipality (0.3% to 0.45% of the cadastral value). A 2023 measure intended to abolish the age-based depreciation on IMI for AL properties (fixing the depreciation coefficient at 1, increasing annual IMI) was overturned in August 2024 after strong opposition from property owners. Therefore in 2026, an AL property pays the standard IMI rate, with no specific surcharge.

Capital Gains on Sale

A property used for Alojamento Local (AL) is generally treated as a business asset for capital gains purposes. The tax treatment depends on whether the property was a primary residence or a secondary (investment) property.

Primary residence:

If the property was the owner’s main residence but was used for AL, the usual main residence capital gains relief is lost, unless the AL activity was formally ceased at least 3 years prior to the sale. If sold immediately after AL use, up to 95% of the capital gain may become taxable, as the property is treated as a business asset.

Secondary / investment property:

For properties that were never used as a primary residence, capital gains are taxable regardless of AL activity. In this case, the sale generally follows the standard rules applicable to investment properties, with 50% of the gain subject to IRS (for resident individuals), adjusted by inflation coefficients. Operating the property as an AL does not, by itself, remove any main residence exemption, as none applies to secondary homes.

In all cases, advance tax planning is strongly recommended, particularly for owner-occupiers considering a future sale of a property previously used for AL.

Profitability Example for a €1,000 Booking

Let’s take a concrete case of a one-week booking at €1,000, paid by a guest via a platform like Airbnb, to illustrate revenue distribution, fees, taxes, and the owner’s final income.

Platform Commission – Airbnb currently charges a 15% commission to the owner, which amounts to €150 in this example. The traveler, on their side, also pays service fees, but these do not pass through you.

→ Amount transferred by Airbnb: €850.

VAT :

• If you are not subject to VAT (exempt), there is no VAT to remit or recover: the €850 is gross income for you, but you cannot deduct VAT on your expenses.

• If you are subject to VAT (6%), the €1,000 rate is VAT-inclusive. You must therefore remit €56.60 in VAT collected from the guest. Your actual net-of-VAT revenue is €943.40, and since you received only €850 after Airbnb’s commission, your net revenue before VAT is €793.40.

💡 Note: Being VAT-registered allows you to recover VAT at 23% on all professional expenses (furnishings, concierge services, renovations, etc.). This makes the regime attractive if you have significant costs.

Net Income Before Tax :

Under the VAT exemption, you receive €850 (no possibility to recover VAT on your expenses).

Under the VAT regime, you receive €793.40 net of VAT, but with the possibility to recover VAT on your investments.

The VAT impact is therefore neutral in the short term but can improve profitability if you have significant expenses.

Income Tax :

Let’s assume this is an apartment outside a containment zone. With the 0.35 coefficient, on €1,000 of gross revenue, €350 would be subject to the IRS progressive rate (marginal rate depending on your other income). For reference, if you are in the 28% bracket, this equals roughly €98 in IRS.

If the property were in a containment zone (0.50 coefficient), €500 would be taxable, meaning about €140 at the same 28% rate.

Other operating costs: You would of course need to deduct the share of regular expenses attributable to that week’s rental — for example, the guests’ water/electricity consumption, and any local tourist taxes (see later) that must be remitted to the municipality. These costs vary greatly, but in high summer season, gross receipts generally far exceed costs, while in low season, lower occupancy must be offset.

Summary table for €1,000 gross revenue

Want to run your own simulations?

Airnest REIM provides exclusive profitability calculators, created with its accounting partners.

These allow you to compare tax regimes, estimate your net income based on your actual expenses, and forecast the impact of VAT.

Analysis by city and Regional areas

The AL market is heavily concentrated in the country’s main tourist areas, with local regulations varying widely. Here’s an overview of the major cities and regions as of 2026 :

Lisbon

Lisbon remains the most heavily regulated AL market in Portugal. By the end of 2023, the city had approximately 19,000 registered AL units, largely concentrated in the historic center. In several central neighborhoods, the proportion of housing units used as tourist accommodation far exceeds sustainable thresholds, prompting the municipality to adopt restrictive local policies.

Following the national reform introduced by Decree-Law n.º 76/2024, Lisbon regained full regulatory autonomy and adopted a new municipal AL regulation in late 2025, which is fully applicable in 2026.

Under this regulation, the city is divided into absolute contention zones, relative contention zones, and micro-containment areas, based on the ratio of AL units to permanent housing.

• Absolute contention zones (no new AL registrations // ≥10% AL density)

  -> New AL licenses are prohibited in freguesias or neighborhoods where 10% or more of the housing stock is dedicated to AL. This includes large parts of the historic and inner-city areas, notably Santa Maria Maior (≈67%), Misericórdia (≈44%), Santo António (≈25%), São Vicente (≈16%), Arroios (≈13–14%), Estrela (≈11%) and specific neighborhoods within Alcântara that also exceed the 10% threshold.

• Relative contention zones (highly restricted // 5%–10% AL density)

  -> In areas with an AL density between 5% and 10%, new AL registrations are not granted as a rule and are only possible under exceptional circumstances, subject to specific municipal authorization. This currently applies to parts of Avenidas Novas (≈8–9%), Belém (≈5–6%), Campo de Ourique (≈5–6%), Penha de França (≈5–7%), Parque das Nações (≈6–7%), Ajuda (≈5–6%) and Campolide (≈5–6%), among other localized neighborhoods approaching the upper threshold.

• Micro-containment at neighborhood level

  -> The regulation also introduces a granular approach at the bairro level. Certain neighborhoods within otherwise unrestricted freguesias are classified as saturated and fully closed to new AL registrations. This applies notably to specific areas in Alvalade, Marvila, and Beato, among others, with more than a dozen additional neighborhoods subject to full or partial restrictions.

In practice, almost the entire central area of Lisbon is closed to new AL licenses. While existing licenses remain valid, the municipality has introduced strict limitations on license transfer in containment zones, meaning that in many cases an AL license does not automatically survive a sale, except in legally protected situations (inheritance, divorce, family reorganization). Lisbon’s stated policy objective is to progressively reduce the overall AL ratio below 5% citywide, encouraging the conversion of tourist units into long-term residential housing.

However, alternative solutions remain possible through Airnest REIM, subject to a thorough case-by-case assessment, such as structuring the activity under specific operational models, or focusing on mid-term rentals (30–90 days for foreign remote workers), which do not require an AL license. Another viable path could be traditional hospitality projects, although these require a different licensing framework — and paradoxically, the municipality has continued to issue permits for new hotels in the city center, a practice that remains controversial.

Despite these restrictions, Lisbon remains highly profitable for existing AL licenses: nightly rates are among the highest in Europe, and occupancy often reaches 85% in summer. Investors who already own a “turnkey” AL in the center continue to generate strong returns — a key reason many oppose forced conversion. For newcomers, opportunities exist in Greater Lisbon municipalities such as Cascais, Oeiras, and Sintra, where tourism demand is strong but — for now — local restrictions remain lighter than in the capital.

Note : The 2026 AL zone map for Lisbon is available on the Lisbon City Council’s official website or in the March 2026 report. (https://websig.cm-lisboa.pt/MuniSIG/visualizador/index.html?viewer=LxInterativa.LXi)

Porto

Porto, the country’s second-largest city, has also experienced strong growth in Alojamento Local over the past decade, with more than 10,000 AL units registered across the metropolitan area. In contrast to Lisbon, Porto has followed a more targeted and progressive regulatory approach, aiming to preserve its historic core while allowing controlled growth elsewhere. Porto first introduced a Regulation for the Sustainable Growth of AL in 2020, establishing restriction zones in the Historic Centre. In 2023, even before the national reform, the municipality had already suspended new AL registrations in the historic core and in Bonfim, a rapidly gentrifying and tourist-heavy district.

Following the national reform introduced by Decree-Law n.º 76/2024, Porto adopted an updated municipal AL regulation in late 2025, applicable in 2026. Under this framework, the city lifted any blanket freeze but maintained clearly defined contention zones.

New AL licenses remain prohibited in the historic core, covering the former central freguesias of Sé, Cedofeita, Santo Ildefonso, São Nicolau, Miragaia, and Vitória (including areas such as Ribeira, Aliados, and the UNESCO-listed centre). The Bonfim district also remains closed to new AL registrations due to its high tourist density. Outside these zones, new AL registrations are still permitted, subject to standard compliance and monitoring. A notable feature of Porto’s 2026 approach is enforcement and registry clean-up. The municipality has highlighted that a significant share of registered AL units were inactive or non-compliant (“ghost licenses”). As a result, mandatory insurance verification and inspections are actively used to remove inactive registrations and free capacity where possible.

The regulation also allows the municipality, in certain areas, to issue temporary or revocable AL licenses, depending on local market conditions and housing pressure, rather than treating all licenses as permanently guaranteed in practice. This does not overturn the national principle of indefinite licenses but reflects Porto’s intention to retain flexibility in saturated areas.

For investors, Porto remains more accessible than Lisbon in 2026, with new AL licenses still possible in non-saturated areas such as Boavista, Campanhã, and Lordelo. Returns remain strong, with Porto continuing to rank among European cities with high average nightly rates in recent years. However, competition is increasing, as many property owners and investors have redirected their AL strategies from Lisbon toward Porto and other secondary cities. Porto’s regulatory approach seeks to strike a balance between preserving its UNESCO-listed Historic Centre from excessive tourist monoculture while still benefiting from sustained tourism demand.

Faro & Algarve

The Algarve region in southern Portugal remains one of the country’s most important tourist destinations, where Alojamento Local (AL) plays a central role in the local economy. The city of Faro, while the regional capital, is not itself the most touristic area and primarily serves as an airport and administrative hub. As of 2026, Faro has not introduced any specific restrictions on AL.

Most AL activity in the Algarve remains concentrated in coastal resort municipalities such as Albufeira, Loulé (notably Vilamoura), Portimão (Praia da Rocha), Lagos, and Tavira. To date, none of these municipalities have adopted a general moratorium on new AL licenses. On the contrary, the Algarve has continued to experience steady growth in AL activity. By the end of 2025, the region counted over 40,000 registered AL units, representing close to one-third of Portugal’s total AL supply.

That said, Algarve municipalities remain increasingly attentive to housing pressure. Several local councils have publicly discussed potential zoning or quota-based measures should residential affordability worsen. For example, Loulé has previously explored restricting AL in parts of its historic center, while Lagos continues to monitor AL density in its old town. However, as of 2026, no binding freeze or regional containment regime has been enacted in the Algarve. (By contrast, isolated cases outside the region—such as Ericeira in the Lisbon area—remain subject to local caps.)

Following the end of the national freeze under the 2025 reform, new AL applications remain broadly admissible across the Algarve, subject only to standard compliance requirements. Investors are nonetheless advised to verify local regulations on a municipality-by-municipality basis, as targeted measures may emerge. For instance, Vila Real de Santo António has announced its intention to prevent Monte Gordo from becoming overly dominated by AL, and Portimão has publicly considered future quotas in areas such as Ferragudo. At present, these remain policy discussions rather than enforceable bans.

Profitability outlook : From an investment perspective, the Algarve continues to offer some of the strongest AL returns in Portugal. Key resort towns benefit from a long tourist season (typically April to October), with very high summer occupancy rates—often exceeding 90%—and nightly rates commonly ranging from €100 to €200 for well-located family villas or apartments. Operating costs (such as pool and garden maintenance, cleaning, and utilities) must be factored in, and most municipalities apply a moderate tourist tax (for example, Albufeira applies a per-night fee—see local details below).

The main challenge in 2026 is competition: the Algarve market is mature and crowded, with a large supply of similar listings. As a result, service quality, professional management, and guest reviews are decisive factors in achieving above-average performance.

Secondary Cities and Other Regions

Outside Lisbon, Porto, and the Algarve, two clear dynamics are emerging in 2026: on the one hand, several medium-sized tourist cities are adopting preventive or targeted AL restrictions; on the other, a number of previously underdeveloped areas for short-term rentals are becoming new investment hotspots.

• In historic cities such as Sintra, Évora, and Coimbra, AL activity is increasingly monitored. Sintra, a highly touristic site near Lisbon, froze new AL licenses in its historic center in late 2024, a measure that remains in force in 2026, citing heritage protection and residential housing pressure. Évora (Alentejo) currently has no formal containment regime but has publicly indicated that restrictions may be considered if AL density increases within its UNESCO-listed historic walls. Coimbra, a university city, has so far focused primarily on regulating student housing rather than tourist rentals, but local authorities continue to monitor AL growth.

• In the Porto metropolitan area, Vila Nova de Gaia suspended new AL registrations in several districts starting in 2024, extending an existing moratorium that continues to apply in 2026. The municipality aims to curb excessive AL growth while encouraging hotel development. Braga, a major northern city experiencing rapid tourism growth, announced in late 2024 that it was preparing a dedicated AL regulation, with possible quotas if density exceeds predefined thresholds. Viana do Castelo has, since 2023, prohibited apartment-based AL in its city center—allowing only standalone houses—in order to protect the long-term residential rental market; this policy remains unchanged.

• In the Lisbon region, Cascais, an upscale coastal resort, has not adopted a formal suspension of AL licenses as of 2026, opting instead for close monitoring. The municipality increased its tourist tax to €3 per night in 2025, signaling a cautious regulatory stance without directly limiting new registrations. Oeiras and Odivelas continue to assess potential regulatory measures, particularly as AL activity spreads outward from Lisbon due to restrictions in the capital. Mafra/Ericeira remain subject to a long-standing local regime (in force since 2018) that caps AL licenses as a percentage of the total housing stock, especially relevant in Ericeira as a major surf destination.

• Inland and interior regions remain actively encouraged by both national and local authorities. Smaller historic cities such as Tomar, Guimarães, and Aveiro are experiencing rising tourism demand and currently face no municipal AL restrictions. Notably, Aveiro has reiterated that it has no intention, as of 2026, to impose limits on AL, preferring a market-driven approach to tourism development.

In summary, a clear geographic pattern has emerged by 2026: high-pressure urban centers (Lisbon, Porto, Sintra, parts of Gaia) are tightening AL rules; coastal resort areas remain broadly open but increasingly cautious; and interior regions actively welcome tourist accommodation to support local economic growth. For foreign investors, the most attractive opportunities are often found outside hyper-central zones, such as Greater Lisbon beyond the historic core, Greater Porto outside UNESCO-protected areas, or emerging destinations like the Douro Valley, Comporta, and Portugal’s central cultural corridor. These markets frequently offer lower acquisition costs and higher net yields, while still benefiting from growing tourism flows.

Post-License Obligations : Day-to-Day Operation

Obtaining the license is only the first step — an AL operator must then comply with several ongoing obligations throughout the activity.

• Declaration of Stays to Immigration Authorities (AIMA / SIBA):

  This is an obligation often overlooked by new hosts. Every stay by foreign guests (non-Portuguese nationals) must be declared for immigration control purposes through the SIBA platform, which is now managed by AIMA (Agência para a Integração, Migrações e Asilo), following the dissolution of SEF. Through the SIBA online system, the owner must declare the identity, nationality, and length of stay of each foreign guest within 3 days of arrival. This process is equivalent to hotel police registration requirements. In practice, once registered on the platform, the declaration takes around 1–2 minutes per booking. Failure to comply may result in significant fines, as this obligation remains linked to national security controls.

  
  

• Tourist Tax:

  Most Portuguese cities levy a tourist tax (taxa turística) that AL operators must collect from guests and remit to the municipality. Rates vary by location. As of 2026, the main examples are:
  - Lisbon: €4 per person per night, capped at 7 nights
  - Porto: €3 per person per night
  - Cascais: €3 per person per night
  - Smaller towns typically apply lower rates (around €1–€2)
  *You must verify the applicable rules with the municipality, usually by registering on the local tourist tax portal, submitting monthly declarations, and paying the amounts due. In some cities, platforms such as Airbnb automatically collect and remit the tourist tax on the host’s behalf (notably in Lisbon and Porto), but this should always be verified per location. Failure to remit the tax may result in penalties.

  
  

• Invoicing and Accounting:

  Even under the simplified regime, you are required to issue receipts/invoices for every stay (typically one per booking). The simplest method is to use the official e-Fatura tax portal, where you can declare each rental (amount, dates, guest’s name) and the system generates a digital invoice linked to your NIF. Airbnb and similar platforms do not do this for you (they are only intermediaries). These records allow the tax authorities to track your income and allow you to record deductible business expenses on the same portal (if under the real regime, or to justify exceeding the €27,360 threshold). Make sure to keep all expense invoices related to your AL on the e-Fatura portal, categorizing them as business expenses — this is essential in case of an audit or to avoid the 15% penalty mentioned in the taxation section.

  
  

• Ongoing Maintenance and Safety Compliance:

  You must keep the property compliant at all times. This includes regular inspections — e.g., the fire extinguisher must be checked and recharged annually (keep the certificate), and the gas installation must be inspected periodically by a certified technician. You should also maintain an adequate stock of supplies (linen, etc.) to ensure smooth turnover between stays. Unannounced inspections by ASAE or the municipality may occur following a complaint; they will check for mandatory equipment (fire extinguisher, first aid kit, 112 emergency poster, complaints book, etc.) and the overall condition of the property. Serious non-compliance can result in suspension of the license until remedied.

  
  

• Neighborhood Relations:

  While less tangible legally, this is crucial for sustainable operation. The new law grants neighbors the right to take action in cases of repeated disturbances. It is therefore in your interest to build good relationships: inform neighbors of your activity, provide them with a 24/7 contact number in case of issues, set strict house rules on noise and shared spaces, and communicate them to guests (e.g., by posting them in the apartment). Many conflicts can be avoided through prevention. Some managers in Lisbon even distribute a “Good Neighbor Manual” in the building, explaining that guests will be required to behave appropriately, etc. Such initiatives can defuse hostility and prevent municipal complaints.

By complying with these obligations, you ensure the smooth running of your activity and harmonious relations with the neighborhood. Remember that an AL license is a revocable privilege — taking care of it daily (as much as you do your guests) is the key to a sustainable investment.

Risks and Penalties for Non-Compliance

Like any regulated activity, Alojamento Local (AL) carries significant risks if the applicable rules are not respected. Below are the main non-compliance scenarios that may lead to financial penalties or legal consequences.

• Failure to Meet Safety Standards : If, during an inspection, mandatory equipment is missing (such as a fire extinguisher) or the property presents safety hazards (faulty electrical installation, lack of emergency signage, etc.), ASAE or the municipality may order the immediate suspension of operations until compliance is restored and impose fines, which can range from a few hundred euros to over €2,000 depending on the severity of the infraction. In the event of a serious incident (fire, guest injury) linked to negligence, the operator’s civil and potentially criminal liability may be engaged—highlighting the importance of proper insurance coverage and strict compliance with safety rules.

• Noise and Neighborhood Disturbances : As outlined earlier, condominium owners may oppose an AL activity in cases of serious and repeated disturbances caused by guests. Excessive noise, parties, or damage to common areas can lead to formal complaints. If disturbances are verified (e.g. through police reports) and supported by a condominium vote, the municipality may suspend or revoke the AL license for up to five years. Preventive measures—clear house rules, noise policies, and careful guest selection—are therefore essential.

• Tax Non-Compliance : The Portuguese tax authorities, namely the Autoridade Tributária (AT), increasingly cross-check declared income with data provided by booking platforms. Underreporting income or failing to declare activity may result in tax reassessments, late-payment interest (currently around 4% per year), and fines ranging from 30% to 100% of the unpaid tax. Failure to issue mandatory invoices may also be fined (typically €150 per missing invoice). While criminal proceedings are rare for small operators, financial penalties can be substantial. Full transparency and proper record-keeping remain the safest approach.

• License Revocation by the Municipality : Beyond nuisance-related issues, municipalities may revoke an AL license if essential legal conditions are no longer met—for example, lack of valid insurance, non-compliance with safety requirements, or unauthorized alterations to the property. Additionally, if a license is found to be invalid due to non-compliance with applicable zoning or regulatory conditions at the time of registration, it may be annulled. In such cases, municipalities may prohibit any new AL registration for the same property for up to five years, preventing immediate reapplication.

• Special Cases :Properties subject to special legal regimes—such as classified historical buildings, subsidized housing, or municipal housing programs—may be subject to specific prohibitions on AL use. In such cases, short-term rentals may be contractually or legally forbidden, with penalties for breach. Operators should always verify whether any special status applies to their property.

Conclusion, Operating an Alojamento Local in 2026 remains an attractive investment opportunity in Portugal, provided that operators strictly comply with legal, tax, and local regulatory requirements. The current framework seeks to balance tourism development with housing protection in high-pressure areas, while preserving profitability in most regions. By staying informed, working with qualified local professionals, and adapting strategies to municipal rules, investors and owners can continue to benefit sustainably from the AL regime in Portugal.

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