AL License updates and how it will affect the real estate market.


AL License updates and how it will affect the real estate market. Navigating the property market in Portugal can be a daunting task, especially when trying to keep up with the ever-changing property legislation. Here at Regency Luxury Property, we are well-equipped to provide expert advice and keep you informed of the latest updates. In this month’s blog, we’ll be focusing on the recently announced changes to the rental market, AL licenses, and how these may impact potential buyers.

AL License updates and how it will affect the real estate market.

On March 30th, the Council of Ministers in Portugal approved a draft law called the ‘More Housing’ program, which aims to regulate local accommodation and address the issue of coercive rentals.  This was implemented due to the large increase in rental properties in Portugal, (currently nearly 110k AL licenses are allocated) and was seen as a necessary step to support Portuguese families needing housing.

AL stands for ‘Alojamento Local’ in Portuguese, which is a legal license needed for the rental of a property, or part of it, for short periods to tourists as private accommodation. Initially, it was predicted that this legislation would include all rental properties in Portugal, which would have greatly affected the real estate market. However, there is good news for potential buyers: the suspension of AL licenses will only apply to apartments and hostels in high-density areas such as Lisbon, Porto, and the Algarve. It also must be noted that these changes will not affect any properties that are already licensed, nor those that are currently in the process of obtaining a license.

This clarification can provide some relief to potential buyers who have been planning to purchase a property for rental investment purposes. While it is true that the new measures will likely impact the real estate market in certain localities, thankfully it does not mean that the entire property market will be affected, therefore, if you were looking for investment in property for rental purposes there are still fantastic opportunities available.

AL License updates and how it will affect the real estate market.

As the draft law currently stands the suspension will last until 2030. After some time, a review of the housing market in high-density areas will be conducted, potentially relieving the ban if a balance can be found between preserving the local communities and the economic benefits of tourism.

According to António Costa, the Portuguese Prime Minister, the adaptations made to the law were due to the vocalized opinions of the public following the release of the initial proposal earlier this year. Despite this, the government’s decision has still received mixed reactions. Some residents welcomed the suspension, believing it would help alleviate the long-term housing shortage and reduce the impact of tourism on their communities. While others, including the tourism industry, have criticized the move and argued that it will harm the local economy and limit many job opportunities.

The ‘More Housing’ program also includes a new forced rental legislation, which faced strong criticism. The policy would make it mandatory for properties that have been vacant for more than two years with no signs of utility payments to be rented out. However, the policy does exclude holiday homes.

Feedback was voiced from property experts, legal teams, and business associations throughout the country, questioning this being fair and how the rule may be enforced, but the Portuguese government has stood by its decision. They stated that the policy is not about expropriation but rather preventing necessary assets from being taken away from market access while charging affordable rent. According to the National Statistics Institute (INE), based on the 2021 Census, there were 723,215 empty homes in Portugal, and Costa stated that change is needed due to us “living at a time of great housing shortage in our country, at a time when, in particular, the younger generations are facing increasing difficulties in their autonomy”.

In showing support for the policy, the government announced that they would also hand over empty properties owned by the state within three months, making the public properties available to private landlords for rental. Additionally, they plan to provide a line of financing to landlords to encourage them to rent out their properties at affordable prices, specifically aimed at private real estate developers, by making rental subsidies of €250 million available as an incentive to develop affordable housing for rent.

Could these new rental policies lead to a rise in properties put up for sale in Portugal? Only time will tell how this may impact the real estate market in the country in the long term.

One certain thing, Regency Luxury Property is always here to support our potential buyers through any questions or queries they may have and provide sound guidance with regards to the changes in legislation.

The Portuguese real estate market remains a secure investment option for those seeking to relocate, acquire a second home, or generate rental income. With over 20 years of experience in the real estate industry, our team is committed to ensuring that you have access to the most accurate information before making any significant decisions, and we are always available to guide you through the process. Don’t hesitate to reach out to us today at Regency Luxury Property!

AL: suspension of new licenses excludes low-density zones — idealist/news (

Government approves local accommodation and coercive rental measures – Essential Business (

Forced rental to go ahead for vacant homes – The Portugal News