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Property owners in Portugal can generate income by renting out their properties on a short-term basis for temporary accommodation, mainly to tourists, known as Alojamento Local (AL). International travelers are more easily reached via platforms like Airbnb, Booking.com and Vrbo.However, there are registration procedures, municipal restrictions, safety requirements and tax obligations to running a short term rental in Portugal.
Before you purchase or list property, check that an AL registration is permitted at that address.
This guide explains how the AL system works, how to register a property, what taxes may apply and what investors should know in 2026.
What Is Alojamento Local (AL) in Portugal?
Alojamento Local is the legal framework for places that offer paid temporary accommodation, mostly to tourists, without being hotels or conventional tourist resorts. The main AL categories are apartments, houses, guesthouses and rooms.
Unlike a standard residential lease, AL means running a tourist accommodation business. The classification depends on the nature of the activity, not just on whether a guest stays fewer than 30 days.
Registered properties get an AL number from the National Local Accommodation Registry (RNAL). The number has to appear in your advertisements and on booking platform listings. If you plan to rent through Airbnb or similar platforms, check your registration obligations before you accept guests.
Portugal's Short-Term Rental Laws in 2026
Portugal’s AL framework is mainly governed by Decree-Law 128/2014, as amended. Decree-Law 76/2024, which took effect in November 2024, reversed several restrictions brought in under the Mais Habitação housing program. Among other changes, it removed the general expiry rules for certain registrations and made it easier again to transfer AL registrations, with some exceptions and municipal restrictions.
The reform also strengthened the role of municipalities, though. Local authorities can set up containment areas, restrict new registrations and adopt rules meant to balance tourism with permanent housing. Additional legislation from July 2026 lets certain temporary municipal suspensions run until the end of 2026.
So an AL registration that’s possible in one municipality or neighborhood may be restricted in another.
Are New AL Licenses Allowed in Lisbon, Porto and the Algarve?
It depends on where the property is.
Lisbon has established containment areas where new AL registrations are restricted. Its municipal regulations were revised in December 2025 and set different levels of restriction for different areas. Some exceptions may apply, but don’t assume that buying an apartment in central Lisbon gives you the right to run tourist accommodation.
Porto and municipalities in the Algarve may also have local restrictions or conditions.
Before you buy a property for short-term rental income, check the current municipal rules and whether that specific address can be registered.
If the property already has an AL registration, look at it closely. Whether it can be transferred and still be valid may depend on local rules and transaction details.
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How to Obtain an AL License in Portugal
People often call it an AL license, but legally the process is a comunicação prévia com prazo, a prior notification with a set waiting period.
Step 1 – Submit the Registration
Please check that the property is suitable for AL before applying. Check local containment areas, building-use requirements and any other restrictions on the property. If it’s part of a condominium, review the condominium rules.
Step 2 – Provide Property Information
The registration asks for information about the operator, the property, the type of accommodation and your legal right to occupy the premises. You may also be asked for property records, ID, declarations and proof you have the right to operate the accommodation. The exact requirements depend on the property and the law.
Step 3 - Submit the Prior Notification
You submit the registration electronically through Portugal’s official public services system. The municipality generally has 60 days to oppose it, or 90 days for properties in containment areas. The registration number becomes the legal basis for opening to the public once the procedure finishes without opposition. Applying doesn’t mean you can take guests right away.
Step 4 - Meet Safety and Insurance Requirements
Before you open, the accommodation must meet safety, hygiene and operational standards. Depending on its size and features, that can include fire-safety equipment, a first-aid kit, emergency information and other required measures. You must also keep the mandatory civil liability insurance and meet the insurance reporting obligations.
Step 5: Advertise the Registered Property
Once you’ve registered and the property qualifies, you can advertize it. The AL registration number must appear in your ads and on booking platform listings.
Documents Required for AL Registration
The documentation varies according to the property and the operator’s legal status.
| Document or Information | Purpose |
|---|---|
| Operator identification and NIF | Identifies the person or company operating the AL |
| Property identification | Identifies the accommodation and its location |
| Right to use the property | Establishes the legal basis for operating the accommodation |
| Property-use information | Helps establish compliance with the applicable building requirements |
| Required declarations | Confirms compliance with statutory registration conditions |
| Civil liability insurance | Supports compliance with mandatory insurance obligations |
| Condominium documentation, where relevant | Addresses restrictions or authorisations applicable to the building |
Additional documentation may be required in specific municipalities or circumstances.
Best Locations for Short-Term Rentals in Portugal
Portugal attracts visitors throughout the year, but tourism demand varies considerably by location and season.
Lisbon gets international tourists, business travelers and city-break visitors all year. Central neighborhoods such as Baixa, Chiado and Alfama are popular, but registration restrictions make regulatory checks essential.
tourists for its historic center, cultural attractions and the Douro region. Properties near the center and transport links may appeal to short-stay visitors.
Cascais and Sintra offer beaches, cultural attractions and leisure tourism close to Lisbon. Demand can differ between central locations and more residential areas.
The Algarve has strong leisure tourism, especially in Lagos, Albufeira and Vilamoura. Seasonality can make summer and winter revenue very different.
Madeira is another established tourism destination, with demand shaped by international visitors, outdoor activities and longer leisure stays.
Location alone doesn’t guarantee profit. Look at local competition, average nightly rates, occupancy, operating costs and whether you can legally get or keep an AL registration.
Taxes on Short-Term Rentals in Portugal
Normally, the income arising from the operation of an Alojamento Local is treated as business income and not as normal income from residential letting. For individual operators, it usually falls under Category B of Portuguese Personal Income Tax (IRS). How you’re taxed depends on your situation, your business structure and your accounting regime.
Simplified Tax Regime
Under the simplified regime, your taxable income is worked out by applying set coefficients to your eligible revenue. For AL run as an apartment or house, the general coefficient is 0.35. A coefficient of 0.50 may apply to properties in designated containment areas. Other AL categories may follow different rules, and the simplified regime can come with extra requirements for supporting expenses.
These coefficients decide what share of your revenue counts as taxable income. They aren’t the final tax rates.
Organized Accounting
Under organized accounting, taxable profit is calculated using accounting rules and eligible business expenses. These may include qualifying maintenance, cleaning, utilities and other costs directly related to the operation of the accommodation.
This regime has heavier accounting obligations and may be more applicable to those operators that have large expenses or bigger businesses.
VAT on Alojamento Local
VAT is usually applicable to AL accommodation services. Where the reduced rate applies, accommodation in mainland Portugal is usually taxed at 6%. Madeira and the Azores have different regional rates.
Some small operators may qualify for the special VAT exemption under Article 53 of the Portuguese VAT Code. Whether you do depends on your turnover, where you’re established or resident and other legal conditions. The general domestic turnover threshold is €15,000, and separate conditions apply to eligible businesses established in other EU member states.
If you’re a foreign owner, get tax advice before you assume the small-business exemption applies to you.
Is Short-Term Rental Property Profitable in Portugal?
Short-term rentals can bring in solid gross revenue where tourism demand is strong, but higher nightly rates don’t automatically mean higher profits.
For example, say an apartment charges an average of €120 per occupied night.
| Item | Illustrative Amount |
|---|---|
| Average nightly rate | €120 |
| Occupied nights per month | 20 |
| Monthly gross booking revenue | €2,400 |
| Annual gross booking revenue at the same occupancy | €28,800 |
This example assumes steady occupancy all year and isn’t a market forecast. You still have to cover booking-platform commissions, cleaning, laundry, utilities, insurance, maintenance, property management and taxes. Seasonal vacancy can also cut annual revenue a lot.
Work out your expected net operating income and compare it with the property’s total purchase and setup costs before you decide.
Main Challenges of Operating an AL Property
Regulatory uncertainty is one of the main challenges. Municipal restrictions can affect new registrations, and the rules for an existing property can change.
Running costs are another. Unlike a long-term residential lease, tourist accommodation means frequent guest turnover, cleaning, maintenance and guest communication. Seasonality can also hurt cash flow, especially in coastal areas.
If you live overseas you may want a local property manager to manage guest arrivals, emergencies, repairs and compliance. Lastly, consider condo rules and your relationship with your neighbors, especially in apartment buildings.
How Portugal Residency Advisors Can Help
Investing in a short-term rental in Portugal takes more than picking a popular tourist destination. Before you buy, look at the property’s location, its likely rental performance and whether it can be registered for Alojamento Local.
Portugal Residency Advisors helps international buyers with property searches, due diligence and introductions to legal and tax professionals. We can help you understand what’s involved in buying Portuguese property and bring in specialists on the regulatory and operational requirements.
Your Questions Answered
What is an AL licence in Portugal?
“AL license” is the common name for the registration that lets you offer temporary tourist accommodation under Portugal’s Alojamento Local framework.
Can foreigners obtain an AL licence?
Yes. Foreign individuals and companies can run AL accommodation in Portugal if they meet the legal, tax and registration requirements.
Can I register an Airbnb anywhere in Portugal?
No. Municipal restrictions, containment areas, building-use requirements and other conditions can block new AL registrations at some addresses.
How long does AL registration take?
Municipalities generally have 60 days to oppose a registration, or 90 days in containment areas. Allow extra time to prepare your documents and meet the operational requirements.
Do I pay tax on Airbnb income in Portugal?
es. Income from AL is generally taxed as business income and VAT may also be due depending on your circumstances.
Is an AL registration transferred automatically when I buy a property?
Not necessarily. Whether it transfers depends on the legal framework, local restrictions and the details of the registration. Check this before you buy.
Is short-term rental more profitable than long-term rental?
epends on occupancy, nightly rates, operating costs, taxes, and local demand. Short-term rentals may bring in more gross revenue, but they usually cost more to manage and run.
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