Alojament Local

How to apply for an AL licence in Portugal

If you are thinking of renting your holiday home in Portugal, you will need a Alojament Local (AL) license. Restrictions which were implemented in 2023 prevented new applications for this License being granted on Apartments. These restrictions are currently being reviewed and we are hopeful they will soon be lifted. Contact us for details.

Renting a holiday home in Portugal

The first thing you should know is that only legal property can function as a holiday home to rent in Portugal.

For both apartments and villas, it is mandatory under Portuguese law that the accommodation has a habitation licence (or "licença de utilização", in Portuguese). This document, issued by the Câmara Municipal (city council) of the area where the property is located, basically defines the type of use permitted for a given building or fraction: habitation or non-habitation purposes (commerce, services or industry).

If the property is legal, and with a habitation licence issued, the next step is to request a specific licence from the Câmara Municipal to rent your property as a holiday home.

Applying for an AL Licence

A local accommodation licence ("Licença de Alojamento Local") — also known as AL Licence — allows you to legally rent residential accommodation for short-term tourism.

Each licence has a unique number and is specific to an accommodation. This means that if a homeowner has several properties intended for tourist accommodation, each property must have its own licence.

In Portugal, obtaining an AL licence is mandatory. The main websites promoting holiday homes, such as Booking or Airbnb, also require an AL licence number to advertise the accommodation online.

Requirements to obtain an AL Licence

To have access to an AL licence — and pass the prior inspection carried out by the local Câmara Municipal — the accommodation must meet several requirements stipulated by Portuguese law, namely safety and regulatory obligations. This includes:

  • Providing a safety pack in the accommodation for the use of guests;
  • Having civil liability insurance;
  • Equipping the accommodation with a "Livro de Reclamações" (complaints book) and an information book (which must be translated into 4 languages).

The biggest advantage of hiring a professional rental management company is that the property owner does not have to worry about anything. They will take care of:

  • Assist in the application for AL license
  • Accompanying municipal inspections and verifications by regulatory bodies such as ASAE;
  • Setting up safety equipment (which has very specific installation and maintenance rules!);
  • Updating the property efficiently and within legal deadlines, if there are any future changes to AL laws.

Ignorance of the law will not exempt you from receiving fines in case of non-compliance, so make sure that whoever is managing your holiday home rental is well acquainted with regulations and legal updates.

On the other hand, a professional holiday rental company in Portugal will also take care of the promotional side of things. From ensuring staging for professional photographs to creating media content such as text and uploading it to various promotional platforms, so let the experts do it all for you!

With the Internet as your holiday home "shop window", make sure it is appealing and professional to get the customers and bookings you need to guarantee the success of your holiday rentals.

When you apply for an AL license it is also mandatory to register the start of this business activity with the Portuguese tax authorities. We can recommend an accounting team, with years of experience in assisting foreign holiday homeowners, to help you with this.

Tax consultancy for your holiday home in Portugal

Always keep in mind that renting a holiday home in Portugal is first and foremost a business. As such, you should view this activity as any other commercial activity, including in tax terms.

Counting on tax advice from a specialised team, will save you not only time, but also money. For example, there are situations in which opening a company in Portugal may be more advantageous for tax purposes than renting on an individual basis... only an accountant can help you make this and other decisions that will directly impact your holiday home rental income.

Also keep in mind that all income earned in Portugal is subject to the obligation of issuing invoices for each payment received, as well as paying tax on that income. This includes, of course, income on holiday home rentals.

The support of an experienced accountant will ensure that you comply fully, on time and without hassle with all your tax obligations in Portugal.