With its historical past, breathtaking scenery, and booming travel business, Portugal has grown to be among the most appealing places for real estate investors.
Short-term rental properties—also known as Alojamento Local—are among the most often used forms of real estate investments. Anyone who wants to rent out their house for a brief visit must first have the Alojamento Local license.
From application procedures to legal concerns and how the Alojamento Local license in Portugal may be a beneficial investment, this definitive guide will provide you with all you need to know about it.
What is Alojamento Local?
Short-term rental properties are referred to in Portugal as Alojamento Local, or AL. This idea includes vacation rentals and properties leased for less than thirty-day terms. The Portuguese government mandates that landowners who want to rent their houses on sites like Airbnb, Booking.com, or another comparable service register under an ALojamento Local license.
Apart from legal compliance, the Alojamento Local license guarantees that buildings satisfy safety and quality criteria, therefore ensuring their attractiveness to possible visitors. Although getting the license has many advantages, you should be aware of some obligations and rules as well.
Why is the Local License Alojamento Important?
Legal Compliance:
Renting a Portuguese property without an Alojamento Local Portugal license is against the law. Should you be discovered running without a license, you could be subject to fines, and occasionally, the authorities may order you to stop. Maintaining legal peace and keeping your business running smoothly depends on you ensuring your property is licensed.
Safety Requirements:
For visitors, the licensing system helps to preserve some degree of comfort and security. Before they are let for short-term rentals, properties have to satisfy particular standards including fire safety, building stability, and access for persons with disabilities.
Taxes and Reporting:
With a licença Alojamento Local, you can record rental income through the proper tax lines. This guarantees you follow Portugal’s tax system and pay the relevant taxes. Additionally, gaining access to certain tax benefits and deductions by registering your property is a VAT exemption (should your income be less than a specific level).
Increasing the Property’s Credibility:
Potential visitors usually view the licensed property as more dependable and trustworthy. More reservations and improved ratings resulting from this might directly affect the success of your rental company.
Who Is Qualified to Apply for Alojamento Local License?
One can apply for an Alojamento Local Portugal license from anyone who owns residential property. Residents, as well as foreign property owners, are free to apply for the license; there are no particular limitations depending on nationality. To be qualified for the license, nevertheless, the property has to satisfy specific requirements:
Property Location:
The property has to be somewhere where short-term rentals are permitted. To control over-tourism and safeguard the housing market, certain Portuguese municipalities—especially in important tourist regions like Lisbon, Porto, and the Algarve region—have limited Alojamento Local licenses.
Property Type:
Apartment, home, or villa; the property has to be residential. Short-term rental licensing does not apply to things like commercial buildings, offices, or industrial sites.
Health and Safety Guidelines:
Properties have to satisfy specific health and safety rules, including those pertaining to fire safety and accessibility needs for those with limited mobility.
Alojamento Local Regulation Changes: What You Should Know
Under the Mais Habitação package especially, recent legislative amendments have changed the environment for Portugal’s Alojamento Local (AL) permits. Although certain limits have been lifted, municipalities can control transient rental operations inside their borders. These developments are noteworthy for property owners in Portugal thinking about or already running short-term rental companies.
Mais Habitação Restrictions Reversal (November 2024)
The Mais Habitação package’s limits on Alojamento Local licenses were reversed as of November 2024, therefore giving the municipalities decision-making authority once more. This modification gives municipal authorities the power to authorize administrative rules pertaining to Alojamento Local operations inside their borders. Among the important adjustments are:
- Municipalities have the power to suspend new Alojamento Local registrations in some regions for a maximum term of one year, contingent on local circumstances and demand.
- Alojamento Local licenses for premises that have been idle without documentation of activity will be deemed expired.
- Revocation of the non-transferability provision, which before limited the movement of Alojamento Local licenses between property owners.
- The provision allowing Alojamento Local registrations to be reviewed every five years has been removed, therefore giving more consistency to licensed properties.
Changes for Buildings and Oversight Before 1951
Extra legislative changes have been made to support the environmentally friendly growth of businesses housed in pre-1951 buildings. These commercial operations are now under legal compliance, guaranteeing that the historical significance of older buildings is preserved while they are fit for current usage.
Moreover, control of Alojamento Local activities has moved from parish councils to municipalities and the Food and Economic Safety Authority (ASAE), which today has increasing responsibility for controlling licenca Alojamento Local operations.
Guidelines for Requesting the Alojamento Local License
Though it’s really simple, applying for an Alojamento Local Portugal license calls for close attention to detail. The following actions will help you to register your home for temporary rentals formally:
Check Eligibility First:
Make sure your property satisfies the local municipal standards before applying. See whether your property falls within an Alojamento Local rental approved zone. Certain cities could impose extra limits or have rules on the number of short-term rentals within a given area.
Verify the Property Satisfies Criteria of Safety:
Make sure your house follows all safety codes, including those pertaining to fire extinguishers, smoke alarms, and evacuation routes. These components must be in place before you start the application.
Get a Portuguese Tax Number (NIF):
You need a Portuguese tax number (Número de Identificação Fiscal, or NIF) to apply for the licenca Alojamento Local. Both opening a business in Portugal and tax reasons call for this. Should you not already have one, you will have to seek one at the Portuguese tax office.
Get Necessary Materials:
You will have to send the following paperwork together with your license application:
- Ownership Documents: Documents demonstrating your ownership of the property will be required. One could have a deed or a property registration certificate here.
- Safety Compliance Documentation: Documentation proving your site satisfies accessibility, first-aid supplies, fire safety, and building codes.
- Energy Certificate: Portugal requires all properties rented out to have an energy certificate.
- Identification Records: A duplicate of your residency card or passport.
- Tax Declaration: Evidence of your current tax state-of-affairs.
Turn in the Application:
You can apply for an Alojamento Local license once you have the required paperwork. You can accomplish this online by visiting the Portuguese government’s official website or by turning in the paperwork to the local municipality where the property is situated.
Cover the Registration Fee:
Registering for an Alojamento Local license comes with a cost, varying according to the municipality. Usually, the charge is between €20 and €200. Submitting your application calls for payment of the cost.
Hold off for Approval:
The municipality will check your paperwork and, when necessary, visit the property once your application is turned in. Should your application be approved, your property will be entered into the system, and you will be issued an official Alojamento Local license.
Local Taxation and Reporting Alojamento
You ought to be making sure you are paying your taxes once your property is licensed. Short-term rental revenue is liable to taxes hence it’s crucial to know how to correctly document your rental income.
Revenue Tax:
In Portugal, short-term rental revenue is liable to personal income tax (IRS). Your income will determine the tax rate; nevertheless, it might range from 14.5% to 48%.
VAT Exemption:
Should your rental income fall less than €10,000 annually, you could be qualified for VAT exemptions. If you make more than this amount, though, you will have to pay VAT on your rental income at the usual rate of 23%.
Property Tax:
Based on the value of their property, owners are also obliged to pay an annual property tax (IMI). The municipality determines the tariff.
How Can Your Local Alojamento Business Turn Profitable?
Possessing an Alojamento Local property in Portugal can be quite profitable. These ideas will help you optimize the profits from your rentals:
- Location is important: Select a house in a well-known tourist destination, but also take into account the demand in less busy areas with high value for residents as well as visitors.
- Present Excellent Facilities: Offer a well-equipped property with first-rate conveniences such as fast Wi-Fi, cozy furniture, and a fully supplied kitchen to draw more guests.
- Preserve the Landscape Well: Positive evaluations depend on regular maintenance and cleaning. Make sure your property stays in perfect shape so that more people will visit and reviews will improve.
- Boost Your Listing: Create a thorough and aesthetically pleasing listing, including excellent pictures. Emphasize the special qualities of your house to set it out from the others.
- Make Use of Several Platforms: Don’t let one platform, like Airbnb, define you. To boost visibility, think about offering your property on multiple websites, like Booking.com, VRBO, or neighborhood rental sites.
- Stay Current with Regional Policies: Rules regarding Alojamento Local characteristics vary with time, so it’s crucial to be updated about any new regulations or restrictions that can influence your company.
Find Your Dream Property with Us
Portugal Investment Properties is your gateway to smart real estate investments in Portugal, offering savvy investors access to an exclusive collection of carefully curated properties.
Whether you’re searching for your dream home or a prime investment opportunity in Portugal’s prestigious market, we provide more than just listings – experience a personalized journey tailored to your aspirations.
Begin your journey to discover your perfect Portuguese retreat. Contact us today!
Looking to Invest in Portugal?
Explore our newest listings below!
Frequently Asked Questions About Alojamento Local (AL) License: Guide for Foreign Investors
What is AL?
AL, short for Alojamento Local, refers to local accommodation services in Portugal. It is a licensing framework for short-term rentals, including holiday homes and apartments, allowing property owners to legally rent to tourists.
How to register for Alojamento Local?
To register for Alojamento Local, property owners must submit an application to the local City Council (Câmara Municipal) in the area where the property is located. The process includes providing documents such as proof of property ownership, a floor plan, and a safety certificate.
How to get Alojamento Local?
To obtain an Alojamento Local license, ensure your property meets safety and regulatory requirements, then apply through the local municipality. After approval, you will receive an official AL registration number required to list your property for short-term rentals.
What are the requirements for obtaining an Alojamento Local license?
To obtain an AL license, your property must meet specific safety and habitability standards, such as having fire extinguishers, proper signage, first-aid kits, and liability insurance. Compliance with local zoning and regulatory requirements is also essential.
What taxes apply to Alojamento Local income?
Income from Alojamento Local rentals is subject to taxation in Portugal. Owners must declare rental income as part of their personal income tax (IRS) and may also be liable for VAT if annual revenue exceeds a specific threshold.
Are there restrictions on Alojamento Local in Portugal?
Yes, some municipalities have imposed restrictions or limits on new AL licenses in certain areas, particularly in tourist-heavy zones. These measures aim to balance the local housing market and reduce the impact on permanent residents.
What are the benefits of registering for Alojamento Local?
Registering your property as an AL ensures legal operation and provides access to platforms like Airbnb and Booking.com. It also protects property owners from fines and enables them to capitalize on Portugal’s thriving tourism industry.
How can an Alojamento Local license be revoked?
An AL license can be revoked if the property fails to comply with safety regulations, local laws, or if neighbors file complaints that lead to legal action. Regular inspections may occur, and non-compliance can result in penalties or license cancellation.
