New regulations for Local Lodging (AL) in Portugal came into force as of 1st November 2024.  

The main changes include: 

the repeal of restrictions on new registrations, allowing them throughout the country, (except in contention areas, if municipality rules are different, such as Lisbon and Ericeira, where limitations remain). 

AL licences are now transmissible, under all circumstances

AL licences are not allowed in a property in contention areas where a long-term rental contract has been registered in the previous 2 years.

Municipalities will have more autonomy to restrict AL in certain areas.

The taxation rules remain unchanged, including the tax conditions for the sale of real estate with an AL license.

In addition, the properties must comply with safety, hygiene and compliance requirements with electrical and gas installations.

(we explain a little more below)

The following information is a very quick summary of the changes:

The Local Accommodation (AL) sector in Portugal is experiencing a phase of important transformations with the implementation of new regulations, which came into force on November 1, 2024.
These modifications aim to solve several issues in the sector and establish a more structured framework for short-term rentals.
The new decree adjusts some of the provisions that were introduced in October 2023, with the entry into force of “Mais Habitação” law /(the More Housing Law) Package.

What are the changes?

One of the main changes is the repeal of Article 19 of “Mais Habitação” law, which limited new registrations of Local Accommodation (AL). From November 1, 2024, new registrations will be allowed throughout the country, except in some Containment Areas, such as much of Lisbon and the center of Ericeira, and Suspension Areas (Vila Nova de Gaia). Porto is currently preparing the introduction of Suspension Areas in the central parishes of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau, Vitória and Bonfim.

- Municipalities now have the power to restrict tourist leases and define new containment areas. These temporary suspensions of new registrations aim to control the growth of AL while municipalities design long-term solutions. Municipalities with more than 1000 registered AL’s must implement rules to govern the local implementation of AL’s within 1 year, otherwise national law applies. Some cities have already taken measures:  
Lisbon: Registrations are suspended in all parishes.
Harbor: Limited to high-density areas such as the Historic Center and Bonfim.
Cascais: It chose not to suspend the registrations in order to maintain market stability.
Mafra (Ericeira): There has been a regulated system since 2018.

Transferability rules
The general rule of non-transferability has been repealed nationally. However, municipalities can create restrictions in designated /contention areas, applying only to houses and apartments, and does NOT apply to situations of; inheritance, divorce, transmission to spouse or legal partner, children or parents. 

Expiration of records
AL records no longer expire automatically. The previous requirement for reassessment in 2030 has been eliminated.

- when an AL is implemented in a primary residence, there is no longer a limit to being open for more than 120 days

– hostels still require unanimous approval of the condominium to obtain an AL licence in horizontal property buildings

– the municipality can oppose the registration of AL’s within 60 days (90 days in areas of contention)

– the owner can request an inspection during the process if licence not given

– AL licences are not allowed in a property in contention areas where a long-term rental contract has been registered in the previous 2 years.

– the condominium can request the cancellation of an AL if voted by a majority (more than 50% of the total owner share) if there are proven and repeated acts of disturbance. The municipality will then decide, and the licence can be immediately cancelled, but with a right of reply in person, and in any case may only be cancelled for a period which can’t exceed 5 years

– the maximum capacity of AL’s registered as Apartamentos or Estabelecimento de Hospedagem is 9 rooms and 27 guests.

– fold-up or extra beds may be installed as long as their number doesn’t exceed 50% of “normal” beds.

– the person responsible for the AL has to communicate their telephone number AND email address to the condominium administration

– the municipality may, at any time, request that the AL licence holder provide the contract of the appropriate AL insurance within 3 days.

– AL’s registered as Estabelecimento de Hospedagem may implement other services such as the provision of food and drink

Taxation

The new regulations for Local Lodging (AL), which came into force on November 1, 2024, introduce important changes in the sector, revoking previous restrictions, but keep taxation unchanged.
This means that the tax rules related to the AL operation, including the taxation of capital gains on the sale of the property, remain the same.  If you own a property with an AL license and operate the business directly (as a self-employed person), the 3-year period is still valid. In other words, it is necessary to suspend the activity and wait 36 months (3 years)  before selling to benefit from lower taxation. If you sell the property with the AL license or within 36 months after the end of the activity, you will not be able to deduct expenses on capital gains, and the tax will be calculated on 95% of the gain.

Mandatory requirements to obtain the Local Accommodation license
The requirements for a property to be considered Local Accommodation vary according to the type of unit – whether it is a lodging establishment, apartment, villa or rooms.
These requirements can be divided into three categories: general requirements, safety requirements and other specific requirements, which together make the property eligible for the exercise of the activity.

General requirements

Local Accommodation establishments must have access to the public water and sewage network, hot and cold running water, in addition to keeping the facilities and equipment in good condition and operation.
Each accommodation unit must have:

- A window with direct ventilation to the outside;
- Appropriate furniture, equipment and utensils;
- Exterior light sealing system;
- Doors with security system to ensure the privacy of guests.

As for sanitary facilities, private or common, they must meet the following criteria:

- Security system to ensure privacy;
- In apartments, villas and rooms, there must be at least one toilet for every four rooms, with a maximum of 10 guests per unit;
- In hostels and guesthouses, shared toilet facilities, which are not separated by gender, must have independent toilets with doors and security systems, requiring one toilet, one washbasin and one shower for every six users.
These general requirements ensure that the properties meet the hygiene and safety standards necessary for the activity of Local Accommodation.

Security requirements

Safety is a key aspect of protecting guests and complying with legislation. These requirements may vary according to the type of Local Accommodation, but in general, managers must ensure the following items:
-  Fire extinguisher and fire blanket;
-  First aid equipment;
- Indication of the national emergency number (112).
(For establishments with a capacity equal to or greater than 10 users, the safety standards against fire risks must be followed, according to Decree-Law No. 220/2008 and the Technical Regulation of Ordinance No. 1532/2008.)

In addition to the above requirements, you will have to submit the necessary documentation to the Municipality of the area. An important point to consider is to ensure that electrical and gas installations comply with legal standards.

For personalized advice and to ensure compliance with tax regulations, contact an Accountant or Lawyer.