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Local accommodation (Alojamento Local – AL) in Portugal has consolidated itself as one of the most profitable forms of real estate investment. The sustained growth of tourism, coupled with the preference for authentic and flexible stays, has transformed apartments and houses into true income-generating assets. From Lisbon to Porto, from the Algarve to Madeira, demand remains strong and ensures a solid foundation for those investing in this market.

Recent legal changes have brought greater predictability. The end of license expiry, the possibility of transferring licenses upon property sale, and the autonomy granted to municipalities restore stability to owners and investors. With this new framework, local accommodation remains a solid option for those looking to diversify income through tourism.

The Local Accommodation Market in Portugal

Portugal is currently one of Europe’s most visited tourist destinations, and local accommodation has become a central piece of this dynamic. Many travelers choose AL apartments and villas for their proximity to local life, greater privacy, and flexibility.

For owners, this translates into high occupancy rates and consistent revenues. In areas of strong demand, such as Lisbon, Porto, and the Algarve, but also in emerging destinations like Ericeira, AL has established itself as a passive income opportunity with great appreciation potential.

What is the AL License (Local Accommodation)?

The AL license is mandatory for anyone wishing to operate properties for short-term stays. Registration is done with the National Local Accommodation Register (RNAL) and requires documents such as proof of ownership, civil liability insurance, and safety equipment.

Legalizing the property is not only a legal requirement but also a factor of trust among guests. A valid registration enhances the asset’s value and opens doors to professional and sustainable operation.

What is “Mais Habitação” (More Housing)?

Created in 2023, the “Mais Habitação” program introduced restrictions on AL but was revised in 2024. Decree-Law No. 76/2024 brought greater stability to the sector, eliminating periodic expiry, removing the extraordinary tax, and allowing licenses to be transferred.

Today, it is primarily up to the municipalities to define local rules, ensuring that tourism does not compromise access to housing. For investors, this evolution restores predictability to the market and reinforces the importance of thoroughly understanding municipal regulations before investing.

Recent Changes to AL Licenses

Since November 2024, the AL framework presents five key changes:
Suspension of new registrations in high-density areas, decided by local authorities.
Transfer of licenses upon property sale.
End of the extraordinary contribution (CEAL).
Elimination of the five-year expiry period.
Reinforcement of municipal autonomy.

These changes create a more balanced environment, keeping the sector attractive to owners and investors.

How to Obtain the AL License in Portugal

The local accommodation registration process is relatively simple but requires attention to details that ensure legal compliance. The application is submitted through the Balcão do Empreendedor (Entrepreneur’s Desk) or directly at the municipal council, depending on the case, and culminates with the assignment of a number in the RNAL, which must be included in all advertisements and platforms.

In addition to registration, the property must meet certain requirements and submit specific documentation:
Proof of ownership (or lease agreement with the owner’s express authorization);
Property floor plan and respective use permit;
Applicant’s identification document and tax number (NIF);
Valid civil liability insurance to cover damages or incidents;
Physical and electronic Complaints Book, with a notice posted in a visible location;
Safety requirements, such as at least one fire extinguisher, emergency signage, and evacuation instructions;
Communication of foreign guests through the SIBA system, within a maximum of three working days after entry and departure.

Complying with these demands ensures not only legal peace of mind but also greater guest confidence and property appreciation. A properly licensed AL attracts more bookings and allows for a stable long-term operation.

Best Locations for Investment

Lisbon continues to lead demand, with stable year-round occupancy, although subject to strict municipal rules. Porto follows a similar path, with strong tourism growth.

In the Algarve, seasonality is greater, but summer compensates with very high occupancy rates. Madeira, on the other hand, offers constant demand due to the climate and nature tourism.

The Silver Coast, and particularly Ericeira, stand out as emerging destinations, combining authenticity, proximity to Lisbon, and growing demand linked to surfing. Here, AL – A Casa das Casas (Holidays in Ericeira) specializes in managing AL properties, helping owners to maximize income and comply with all local rules.

Taxation of Local Accommodation

Local accommodation is taxed under IRS Category B. Under the simplified regime, a coefficient of 0.35 applies to apartments and houses, 0.50 in containment zones, and 0.15 for lodging establishments. The taxable base results from applying the coefficient to total revenues.

Additionally, the activity is subject to VAT and municipal tourist taxes, such as €4 per night in Lisbon and €3 in Porto. Owners must also issue invoices, communicate foreign guests via SIBA, and maintain a physical and electronic Complaints Book.

Strategies to Maximize Profitability

The success of an AL goes beyond location. Professional management is crucial to ensuring income: dynamic pricing adjusted for seasons and events, quality photography, clear descriptions, efficient check-in, and quick responses to guests.

In Ericeira, where seasonality is marked by events and surf tourism, AL – A Casa das Casas (Holidays in Ericeira) helps owners adjust rates, optimize calendars, and manage the entire operation—from cleaning to guest communication. This type of support is what allows a property to be transformed into a predictable and scalable income asset.

Invest in Local Accommodation in Ericeira

Investment in local accommodation in Portugal in 2025 continues to offer solid opportunities, supported by a more stable legal framework and growing tourist demand. For owners, it represents the possibility of transforming properties into consistent sources of income.

In Ericeira, this reality is even clearer. Those who own a property in the village can benefit from an expanding tourist market but also face operational and daily management challenges. AL – A Casa das Casas (Holidays in Ericeira) supports owners throughout the entire process—from legalization to complete AL management—ensuring higher occupancy, optimized income, and an excellent guest experience.

FAQ – Local Accommodation in Portugal

1. How to apply for the Local Accommodation license in Portugal?

The AL license must be requested through the Balcão do Empreendedor or directly at the municipal council of the property’s area. The process includes filling out the registration form, submitting the required documentation (proof of ownership, civil liability insurance, property floor plan), and complying with safety requirements. After validation, the RNAL registration number is issued, which must appear on all advertisements.

2. How long does it take for an AL license to be approved?

The registration of local accommodation is usually immediate after submission through the Balcão do Empreendedor. However, municipal councils may conduct inspections, which can prolong the process for a few weeks. On average, the license is regularized within 15 to 30 working days, depending on the municipality and the documentation provided.

3. How much does the local accommodation license cost?

The AL registration application does not have a fixed national cost, but there may be administrative fees applied by municipal councils. Furthermore, compulsory expenses must be considered, such as contracting civil liability insurance, purchasing safety equipment (fire extinguishers, signage), as well as the physical and electronic Complaints Book. These costs vary but represent a relatively affordable initial investment compared to the potential income.

4. What has recently changed in the local accommodation law?

The changes introduced in November 2024 significantly altered the AL framework: the automatic expiry of licenses no longer exists, it is now possible to transfer them upon property sale, the extraordinary contribution (CEAL) was removed, and local authorities were given greater autonomy to define containment zones. These changes provided greater stability to the sector, reinforcing the role of municipalities in regulation.

5. Who can help manage local accommodation in Ericeira?

In Ericeira, one of the most sought-after surf and tourism destinations on the Silver Coast, professional management can be crucial to turning a property into a consistent source of income. AL – A Casa das Casas (Holidays in Ericeira) is a specialist in local accommodation management in the village, supporting owners throughout the entire process—from legalization to daily operation, including price optimization, check-ins, cleaning, and guest communication.