Alojamento Local – A Quick Guide to Tourist Rentals in Portugal

NOTE: The document applies to the situation for AL properties in mainland Portugal, and excluding Madeira and the Açores, which have their own legislation.

BASIC STEPS TO TAKE

Determine if AL registration is possible

Implementing an Alojamento Local activity in a property is now possible in all areas of the country, except possibly where the local municipality has established Contention Areas, Areas of Sustainable Growth, or Suspension Areas. In general, new AL registrations are totally prohibited in Contention Areas and Suspension Areas, and limited in Areas of Sustainable Growth.

As of 1st April 2025, the entire municipality of Lisbon is a Suspension Area, meaning no new AL licences are currently possible, although existing licences can be transferred to another person or entity. There are also Suspension Areas in Nazaré, Viana do Castelo and Porto (União de Freguesias de Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau e Vitória and the Freguesia do Bonfim). In Suspension Areas, new ALs are not allowed, but registrations may be transferred. Note that Lisbon will soon implement its Municipal AL Regulations, which will change the rules again.

So, the first step is to check if the property is located in one of the areas above. If so, it is necessary to consult the housing policy implemented by the local municipality, which should be available online in most cases. Or, simply consult the local Câmara in person.

2. Start business activity (iniciar actividade)

Note: This step assumes you have carried out a basic Business Plan and have decided to initiate the tourist rental activity as an individual, rather than a company, which remains outside the scope of this document. We highly recommend that this step is taken in conjunction with a specialized accountant.

You must have a NIF (tax number, or “número de contribuinte”) and then register as an independent business owner (Empresário em Nome Individual) with the activity code (CAE) 55201, which corresponds to the activity of Alojamento Local. It is also possible to register with CAE 55204 for the Estabelecimento de Hospedagem (Guesthouse) category, and 55205 for a Hostel. If you are planning to hire a company to manage the check-ins/outs, cleaning, washing and other aspects of the business, it is almost always beneficial to register for VAT. Otherwise, the registration can be done such that you are exempt from paying VAT during at least the first year, but we recommend simulating your costs first, to see if the possible VAT deductions on costs means it is beneficial for you to register in the VAT regime. If you have access to your personal area of the Finanças website, you can initiate the business activity online, and you should make sure to activate the option to acquire intracommunity transactions for services.

Note that AL owners resident in a non-UE country must first obtain a Fiscal Representative (FR) who is registered for VAT, to be able to register the AL business activity., and also must be registered themselves for VAT.

3. Register the property

This may be done online if you possess a “Cartão de Cidadão” or the Chave Móvel Digital (which for non-Portuguese nationals must be requested personally at the Loja do Cidadão). Otherwise, the property registration must be done in person, at the local city hall (Câmara). The following is necessary:

Take a look at all details in the form below. The exact fields or layout may change, but this is basically the information that you will be asked for.
https://portugalpropertyinformation.com/wp-content/uploads/2024/11/Alojamento-Local-Registo.pdf
A copy of your passport or other identity document
A copy of the property tax document indicating ownership (caderneta predial)
Copy of rental contract or other legal document authorizing the activity of Alojamento Local, if not the owner of the property
Copy of the business activity registration from Step 1
If the property was built after 1951, you may be asked to present the “Licença de Utilização”. In Lisbon, all Alojamento Local properties must have a residential use licence. In other municipalities (e.g. Porto), a Services licence may be permitted. The relevant municipality should be consulted.

The local city hall has 60 days (90, when in a Contention Area) to inspect the property and make sure all requirements are met in order to grant the Alojamento Local registration number. You should receive a process number immediately, by email, and then at a later stage a document indicating the AL number, which should be published in all adverts and marketing material, including listings on Airbnb, Booking, VRBO, etc.

If no AL number is sent, you can also check the online database of Alojamento Local properties, run by Turismo de Portugal and available here: https://rnt.turismodeportugal.pt/
Some municipalities charge for the inspection – prices can usually be seen on the relevant Câmara’s website. See the Ficha Técnica da ASAE in the useful links section for ideas about what they might be checking for.

Note that the new Alojamento Local law means that the AL registration is transferable, even in Suspension Areas. In Contention Areas, normally AL’s are NOT transferable, but there are exceptions to this rule in the case of death, divorce, inheritance, or transmission to spouse, legal partner, children or parents.

Furthermore, AL properties in a horizontal property condominium building run the risk of the registration being cancelled by the condominium if the decision is taken by a two-thirds majority of the permilagem, or quota share, at a General Assembly of the condominium.

CATEGORY, REQUIREMENTS, CAPACITY

4. Category of the Establishment

When registering a property as AL, it is necessary to indicate which category the property is being registered in. These are: Moradia (single-family properties), Apartamento (apartments, rented as a whole unit), Estabelecimento de Hospedagem (properties with several rooms, each rented individually, e.g. guesthouses) and Quartos (maximum of 3 rooms in a property, rented individually, and only when the property is registered as the permanent residence of the business owner). There is no restriction stipulated in the law for registering an AL in ANY category when it is the permanent residence of the owner.

Within the category of Estabelecimento de Hospedagem, there is a sub-category of Hostel (mostly made up of dormitory type rooms).The revenue from Apartamentos and Moradias are taxed at your progressive IRS rate, on 35% of the total earnings (50% if located in a Contention Area). For Estabelecimentos de Hospedagem and Quartos, it is 15%. So, if your IRS tax rate is 21% and you have an apartment that earns 10.000€ gross per year, you will pay IRS tax of 21% x 35% x 10000 = 735€
Owners of Apartamentos and Moradias are exempt from social security payments, when the only revenue is from this business (see section 15).

5. Requirements for Alojamento Local

Note: we highly recommend consulting the relevant legislation or a specialist for an exhaustive list of requirements. We are not responsible for any consequences caused by not following local and national laws.

Be in reasonable condition, including all equipment
Be connected to the public water supply, or sufficiently controlled private supply, and be connected to a suitable sewerage system. Hot and cold water should be available.
Have a window or opening to the exterior, providing sufficient ventilation, and have a system that allows all natural light to be blocked (shutters, etc)
Possess adequate equipment, furniture and utensils, and all doors must provide a system for the security and privacy of the guests.
Good conditions of hygiene and cleanliness
Security: First aid kit, fire extinguisher, fire blanket, 112 emergency number & no-smoking signs
Establishments with capacity for more than 10 guests should consult the relevant legislation (Decreto-Lei n.º 220/2008, de 12 de novembro) to comply with fire safety rules, meaning the possible installation of smoke detectors, sprinklers, fire extinguishers, relevant signage, and a central fire alarm system. We recommend consulting with a specialist fire safety company in this case.
Official complaints book (Livro de Reclamações), both electronic and hard copy
Alojamento Local sign, according to characteristics defined in the Decree-Law or the 2020 Ordinance (smaller size) and installed next to the main door of the establishment. Can be ordered from suppliers, online or otherwise. Not required (in mainland Portugal) for AL’s registered in the “Moradia” category.
Information booklet, available in 4 different languages which must include Portuguese and English. Includes information about the establishment and its rules & regulations, rules for the collection of waste, instructions for any on-site equipment, rules regarding noise in the establishment and vicinity, emergency telephone number of the business owner, and rules of the condominium, if applicable.
A visible sign in the property indicating general noise rules as per the law Lei n.º 56/2023, de 6 de outubro
The business must be covered by a 3rd party liability insurance policy. Details of such a policy are defined in ordinance Portaria n.º 248/2021, de 29 de junho. However, we highly recommend that you join the national Alojamento Local association (ALEP). Apart from defending all AL owners’ interests, they include the necessary insurance for an AL property in their yearly quota which, for individuals, is just 110€/year. Note that this insurance policy must now be registered online, otherwise the AL licence could be cancelled! More info here.

6. Maximum capacity

Alojamento Local establishments are limited to a maximum capacity of 9 rooms and 27 guests, except in the case of Hostels, which have unlimited capacity, and Quartos, which have a capacity of 3 rooms.

Furthermore, extra beds may be installed as long as they don’t exceed 50% of the capacity of the “normal” beds.

It is only possible to run more than 9 Alojamento Local establishments in one building if the number does not exceed 75% of the total number of independent units.

OPERATIONAL OBLIGATIONS

7. Reporting to SEF

It is obligatory to report to SEF the stays of all foreign citizens up until 3 days after the check-out. It is possible to do this online at https://siba.sef.pt/ (registration required first)

8. City Tax

In some municipalities (e.g. Lisbon, Porto, Cascais, Loulé, Albufeira and many others), it is necessary to charge the municipal tourist tax (taxa turística), on top of the price of the stay, to be paid to the local council, some of which have online platforms for doing this.

9. Arbitration Centres

It is obligatory to have on public display a list of the local arbitration centres (Centros de Abitragem) in case of any litigious situation.

10. INE Statistical Reports

You may be required to send monthly statistics regarding the number of guests at your establishment if so required by the National Statistics Institute (INE), but it is not obligatory if you are not contacted.

11. Complaints Book (Livro de Reclamações)

As a business, you are required by law to make available a Complaints Book to your clients. Since 2018, this should be in both physical and digital formats. The physical complaints book can be bought from the Casa da Moeda, either from their physical stores or online at https://loja.incm.pt/products/impressos-modelo-1898-livro-de-reclamacoes-actividade-privada-1021907

To obtain the electronic version you should register at https://www.livroreclamacoes.pt/:

Scroll down the page and click Entrar below “Fornecedor de bens / Prestador de serviços“
On the next screen, click “Se não tiver conta, registe-se aqui“
You will be asked if you have a Portuguese NIPC, or VAT number. This is the correct option, so click the link on this line, which will take you to the Finanças login screen.
Fill in your NIF and your Finanças password anc complete the registration details
TIP: If you have already registered on this site to make a complaint, use a different email address for your service provider profile, otherwise the platform gets confused.
The “Entidade Reguladora” is ASAE and the activity is in almost all cases Alojamento Local: 55201 – Alojamento mobilado para turistas (it should coincide with the economic activity code, or CAE, that you used to register the business activity above)

FISCAL OBLIGATIONS

12. IRS Declarations

NOTE: We are assuming that you declare your earnings as an individual via IRS declarations and the simplified regime of accounting. Other cases are not covered. We recommend that ALL situations be consulted with a specialist accountant.

Yearly IRS declarations should be made, with earnings from Alojamento Local establishments declared in Category B. For Apartments and Moradias, 35% (50% in areas of contention) of total earnings are taxed at your IRS tax rate (which for non-residents is fixed at 25%). Establishments of the type Estabelecimentos de Hospedagem and Quartos have just 15% of earnings taxed, at the IRS rate of the business owner. These percentages are called “coefficients”.

Example: Apartment with total gross earnings of 15.000€. IRS tax rate of 25% (rate for non-residents). In this case, you are liable to pay tax on your IRS for: 15000 x 35% x 25% = 1.312,50€ (one thousand three hundred and twelve euros, and fifty cents).If total earnings from the Apartamento or Moradia category of AL surpass 27.360€, it is necessary to justify expenses of 15% of the total with official invoices, to maintain the rates above.

Note: In the State Budget for 2020, a new measure was passed for the coefficient for Apartamentos or Moradias in “Areas of Contention” to be increased to 50%.

AL owners can now become exempt from IRS tax on earnings from long-term rentals if an AL registration from before 31st December 2022 is cancelled before the end of 2024, and the property rented out long term. In this case, the owner will be exempt from tax on such rentals (IRS in the case of individuals, IRC for companies) until the end of 2029.

13. IVA Declarations

Whether or not you declare value-added tax (IVA) will depend on if you are registered within the IVA regime or not. This is obligatory when you have a declared turnover of more than the specified threshold (or proportional amount) during the previous fiscal year, and also if you are not fiscally resident in Portugal. It is normally fiscally beneficial to be in this regime if you have a lot of expenses, for example when using the services of a property management company, but obviously the advice of a specialist accountant should be sought.

IVA declarations are made every quarter, or you can opt to declare monthly.

IVA is taxed at the special rate of 6% of the price charged to the guest.If you work with booking portals based outside Portugal, such as Airbnb or Booking, you should register your NIF for “Operações Intracomunitárias”, which will mean that these portals do not add VAT on top of their commission rates, but instead use the reverse charge mechanism. Note that if you are exempt from IVA declarations, you should still declare the reverse charge IVA via the Finanças website. You can check if your NIF is correctly registered in this way at the VIES site: http://ec.europa.eu/taxation_customs/vies/

14. Invoicing

Even though most foreign guests will not require the physical document, an official invoice must be issued for every payment. This is done via an officially registered invoicing program, or via the Portal das Finanças. The amount invoiced should be the total amount including any commissions you pay to booking portals such as Airbnb or Booking.

If you are using a program and not the Finanças website, you will have to export the SAF-T file and then upload it to the Finanças website. This is how the fiscal authorities know how much your establishment is earning.

15. Modelo 30 & Retencões na Fonte (tax withholding system)

If you have paid commission or other expenses to any foreign company (e.g. Airbnb or Booking.com commissions), then you should declare this via the Modelo 30 transaction, on the Finanças website, using the Portuguese NIF of these companies (provided by the Finanças, if not known). Strictly speaking, all these companies should provide you with a 21-RFI form and Certificate of Fiscal Residence, but many don’t even know they have this obligation. If a company doesn’t provide a 21-RFI form and the residence certificate, then strictly speaking you are legally obliged to pay a “Retenção na Fonte” (withholding tax) to the state – 25% of the payment made to each company, declared via the Finanças website, and paid until the 20^th day of the month following the date of the company’s invoice.

16. Capital Gains Tax

Properties used for the activity of Alojamento Local are liable for an increased property gains tax charged on Category B of the IRS declaration, unless they are sold more than three years after the termination of the AL activity. In this case, capital gains are calculated at 95% of the difference between the purchase and selling prices, and you are taxed (on Category B of IRS) at your IRS rate on this amount when the property is sold. Simple example:

Property bought in 2022 for 200.000€
Property used for Alojamento Local starting in 2023
Alojamento Local activity stopped in 2024
Property sold in 2025 for 300.000€

In the above case, in 2025, when the property is sold, there is a capital gains tax due (and paid in 2026) at the owner’s IRS rate on 95% of 300.000-200.000 = 95% of (100.000€). The owner’s IRS rate for this particular calculation is calculated taking into account the gain on the sale, AND other worldwide income, and is declared in Category B of the IRS declaration.

NOTE: In the case above, if the owner stops the AL activity in 2023 and then waits for 3 years before selling in 2026, no Category B capital gains tax is paid! Category B CGT is the specific tax for AL properties. The normal CGT paid when selling a property still applies and is very roughly 50% of the difference between the purchase and sales prices, minus deductible costs, and taxed at your IRS rate.

Further information about capital gains tax paid on property in Portugal here.

17. Social Security

If your earnings derive solely from the activity of Alojamento Local in the Apartamento or Moradia categories, you are not liable for social security payments.

Also, even if you are liable (for example, your earnings derive from the Estabelecimento de Hospedagem category), if you are registering for social security payments for the first time it is usually possible to ask for an exemption for 1 year.Since each situation is different, and often complicated, we recommend consulting the Portuguese Social Security website directly (http://www.seg-social.pt ) or arranging a personal appointment.

MISCELLANEOUS

20. Areas of Contention

Recent Alojamento Local legislation has introduced the concept of Áreas de Contenção, or Areas of Contention. It provides a legal framework for local municipalities to be able to define these areas where Alojamento Local can be restricted, according to a number of conditions, such as:

Suspension of new AL registrations
Prohibition of transferring the AL licence to another person or commercial entity for Apartamentos or Moradias
Limitation of AL licences to a % of registered residential homes
Limit of 7 AL establishments registered to the same owner/manager

Each municipality will be able to clarify which areas, if any, are Áreas de Contenção, and which restrictive conditions apply. At the time of writing, Areas of Contention exist only in Lisbon, and Ericeira.

Note: In the State Budget for 2020, the government included the measure for AL properties in the Apartamento and Moradia categories to be taxed on 50% of total earnings (instead of 35%), when in Areas of Contention, and in Lisbon, this is now the case.

21. Useful links

Decree-Law Nº 128/2014 from 29th August: https://dre.pt/web/guest/pesquisa/-/search/56384880/details/maximized

Decree-Law Nº 63/2015 from 23rd April: https://dre.pt/home/-/dre/67059141/details/maximized

Decree-Law Nº 62/2018 from 22nd August: https://dre.pt/web/guest/pesquisa/-/search/116152179/details/maximized

Ordinance (Portaria) Law Nº 262/2020 from 6^th November: https://dre.pt/pesquisa/-/search/147814581/details/maximized

The “Mais Habitação” law, Lei n.º 56/2023, de 6 de outubro:
https://diariodarepublica.pt/dr/detalhe/lei/56-2023-222477692

AL Association (yearly fee includes insurance!): http://alep.pt

Portal das Finanças: https://www.portaldasfinancas.gov.pt/

Social Security: http://www.seg-social.pt/

AL registration online: https://eportugal.gov.pt/fichas-de-enquadramento/alojamento-local

Chave Móvel Digital: https://eportugal.gov.pt/pt/servicos/obter-informacoes-sobre-a-chave-movel-digital

SEF Registration: https://siba.sef.pt/