Over the past few years, Portugal’s real estate market has been undergoing a very noticeable transformation.

The government has gradually begun reshaping the direction of the housing market, placing increasing policy emphasis on long-term residential rental housing.

For many years, Portugal has been one of Europe’s most attractive real estate investment destinations. Its mild climate, strong tourism industry, and growing international population have drawn large numbers of foreign investors into the market. One of the most important investment models during this period was short-term tourist rentals — known in Portugal as Alojamento Local (AL).

AL is Portugal’s official licensing system for short-term tourist accommodation. In simple terms, any property rented to tourists for stays of less than 30 days must hold an AL registration number. For many international investors, the appeal of Portugal was closely tied to the profitability of the AL market. “Buy property + operate short-term rentals” became one of the dominant investment strategies for years.

However, as more residential properties entered the short-term rental market, major cities such as Lisbon and Porto began facing growing housing pressure. Rising long-term rents, limited housing availability for local residents, and increasing affordability issues for younger generations gradually transformed housing from an “investment issue” into a broader “social issue.”

The policy changes Portugal has introduced in recent years must be understood within this context.

The 2023 “Mais Habitação” Plan: A Turning Point in Housing Policy

In 2023, the Portuguese government launched the Mais Habitação (“More Housing”) program, marking a major turning point in national housing policy.

One of the most internationally significant changes introduced during this reform was the official removal of the residential real estate route for obtaining Portugal’s Golden Visa. The traditional “buy property to obtain residency” model was formally eliminated, as the government sought to reduce the market’s dependence on external capital and short-term speculative investment.

At the same time, the short-term rental sector (AL) also came under tighter regulation.

The government began restricting the issuance of new AL licenses, introduced additional taxation measures (CEAL), and strengthened the ability of condominium owners to oppose short-term rental operations within residential buildings.

The policy direction became increasingly clear:

Portugal wanted to bring more housing back into the long-term residential market, rather than allowing it to remain primarily tied to the tourism economy.

2024–2025: From “Restrictions” to “Targeted Regulation”

Decree-Law No. 76/2024, announced in October 2024 and effective from November 1st, significantly revised some of the more aggressive restrictions introduced earlier.

The new legislation restored the permanent validity of AL licenses and once again allowed licenses to be transferred together with the sale of the property. Nationwide freezes on new AL registrations were removed, and the special AL tax (CEAL) was abolished.

This signaled that Portugal was not simply trying to “eliminate short-term rentals,” but rather attempting to rebalance the market.

Region	Current Status	AL Restriction Threshold	Market Outlook
Historic Lisbon	Closed	10%	No new licenses; licenses expire upon property sale
Greater Lisbon	Mixed	10% city-wide threshold	New licenses still possible in lower-density areas
Historic Porto	Restricted	15%	Regulated, but not fully closed
Greater Porto	Open	15%	New licenses still available
Algarve	Open	No unified cap	Market remains relatively accessible

By the end of 2025, Lisbon officially approved a new Local Accommodation Regulation (RMAL), creating one of the strictest AL control systems in Portugal’s history.

Under the new rules: Areas where AL properties exceed 10% of permanent residential housing become “absolute containment zones,” where no new AL licenses may be issued. Areas between 5% and 10% enter “relative containment zones,” where additional approvals are required for new AL registrations.

Several core tourist districts — including Santa Maria Maior, Misericórdia, and Santo António — have already entered strict restriction zones. These areas cover many of Lisbon’s traditional short-term rental hotspots, including Alfama, Baixa, Bairro Alto, and Avenida da Liberdade.

More importantly, within these restricted zones, even if a property already holds an AL license, the license can no longer automatically transfer to a new owner upon sale.

This fundamentally changes the investment logic behind “AL-licensed apartments,” which are no longer viewed as permanently transferable tourism assets in the way they once were.

At the same time, Lisbon also cancelled approximately 6,765 AL registrations in 2026 — roughly 40% of the city’s total — primarily due to prolonged inactivity or non-compliant insurance documentation.

2026: Europe’s Short-Term Rental Market Enters the “Data Regulation Era”

The European Union’s Regulation (EU) 2024/1028, signed in 2024, will officially come into force on May 20, 2026.

The regulation does not create a new AL licensing system, but instead introduces a unified data supervision framework across Europe — effectively pushing the short-term rental industry into a new era of systematic digital regulation.

Under the new rules: Platforms such as Airbnb and Booking.com must verify hosts’ registration numbers. Platforms must submit monthly rental data to governments, including nights booked, number of guests, and property addresses. Listings with invalid or non-compliant registrations must be removed directly from the platform.

In the past, many unlicensed or “grey-market” rental properties were only discovered through physical inspections. Going forward, regulation will increasingly rely on automated cross-checking of platform data.

Portugal has already established a national RNAL database, while ASAE (Portugal’s Food and Economic Safety Authority) has conducted more than 12,000 inspections related to AL operations. In many ways, Portugal has already entered this new regulatory framework ahead of much of Europe.

Long-Term Rental Housing Is Becoming the New Direction of the Market

Behind all these policy changes lies a much broader trend.

In the past, real estate was increasingly treated as a transactional and tourism-driven asset market. Today, Portugal — along with much of Europe — is gradually shifting housing back toward its original role as a long-term residential market.

As a result, long-term rentals, student housing, Build-to-Rent developments, and professionally managed residential assets are becoming increasingly aligned with government policy priorities and attracting growing attention from long-term institutional capital.

Reference Link: https://www.youroverseashome.com/portugal/articles/short-term-rental-rules-portugal-2026