27.10.2025

Properties for rent inPortugal. What is an AL license and do you need one?

Editor: Welcome to the first episode of “Invest with Partners.” Today we have Joanna Czapska, Director of Partners International Real Estate, who will discuss key aspects of investing in Portuguese properties with an AL license. Joanna, let’s start with the basics: what is an AL license and why is it such an important document?

Joanna Czapska: The AL (Alojamento Local) license is an official permit issued by the Portuguese authorities that legalizes short-term tourist rentals—those for periods of less than 30 days. Without it, rentals through, for example, Airbnb or Booking.com are illegal and can result in fines of up to €50,000. Crucially, long-term rentals (over a month) do not require an AL—a standard contract is sufficient.

Portugal is seeing record numbers of tourists—over 30 million people visited the country in 2024. Regions like the Algarve, Lisbon, and Porto are magnets for travelers, which translates into high rental yields (up to 4-8% annually).

The documents mention that the issuance of new licenses in central Lisbon and Porto will be suspended from 2023. How does this impact the market?

In Lisbon, Porto, and parts of the Algarve (e.g., Faro), new AL licenses are being blocked to curb excessive short-term rentals. The result? Properties with active licenses have become rare finds – their prices in these locations are rising by as much as 10-15% annually. This is the only way to legally rent to tourists in city centers.

What about other regions? Where else is worth investing?

I recommend three destinations:

Lisbon and Porto – Despite the restrictions on new licenses, existing AL properties are extremely valuable. Our selection of apartments is ideal for investors seeking prestige. We help you find such gems, for example, apartments from €400,000 in historic districts.
Algarve – The average apartment price is €350,000–€850,000. We offer exclusive apartments with private pools and direct beach access.
Silver Coast and Alentejo – A paradise for those seeking tranquility and lower prices. Homes start at just €250,000, and the process of obtaining an AL license is simpler than in large cities.

What steps should an investor take to buy a property with an AL license?

At Partners International, we guide clients step by step:

Due diligence – We check whether the property has an AL license,
Cost optimization – taxes:
– IMT: 5-8% of the purchase price,
– IMI: 0.3-0.8% annually,
– AIMI: Additional tax for properties over €600,000 – (0.7%-1.5%)

What mistakes do investors make most often?

Two main ones:

Ignoring prohibitions – In some municipalities, entire buildings cannot be rented without “tourist” status.
No license audit – Some people forget that the AL license must be renewed after 5 years.

What makes Partners International stand out from other agencies?

We have access to exclusive offers, such as the apartments with an active AL license we discussed, and a team of experts living in Portugal. We also offer support throughout the entire purchase process. Furthermore, working with our agency, the client incurs no costs; our commission comes from the seller.

Let’s summarize – why is Portugal a good choice?

It combines profit (4-8% annually) with quality of life. Portugal is a safe country that attracts tourists with its monuments, climate, and cuisine. And by investing in a property with an AL license, you gain the assurance of legality and a stable income.

Thank you for the valuable conversation! Where can I find more information?

Please visit our website partnersinternational.pl or schedule a personalized consultation. We will help you find not only real estate, but also… a Portuguese paradise on earth!

AL License (Local Rental)

The Local Rental (AL) license in Portugal is an official permit that allows property owners to legally rent out their properties on a short-term basis, most often to tourists through platforms like Airbnb, Booking.com, or Expedia. It is a mandatory document for anyone wishing to operate a short-term rental business, whether an individual or an investor owning multiple apartments.

The AL license confirms that the property complies with safety, hygiene, and urban planning regulations, and that it has been registered with the local municipality (Câmara Municipal). The licensing process includes registering the property, providing a floor plan, a NIF (Portuguese Tax Identification Number), liability insurance, and confirming that the property has the appropriate equipment – from fire extinguishers and a first aid kit to emergency signage and compliance with fire safety standards. Once registered, the property receives a unique license number, which must be included in every rental listing.

In practice, an AL license is not only a legal requirement but also a factor influencing the value of an investment. A property with a valid Alojamento Local license is much more attractive to investors, as it allows for immediate rental activity and income generation without having to wait for permits. However, it’s worth noting that in some parts of Portugal – particularly Lisbon, Porto, and the Algarve – restrictions have been introduced on the issuance of new AL licenses due to tourist pressure and to protect the local housing market. In so-called “restricted areas” (zonas de contenção), new licenses may be temporarily suspended, meaning investors often seek properties with an active license, as its transfer to a new owner is possible as long as rental activity continues.

From a tax perspective, the owner of a property with an AL license is treated as a sole proprietor. This requires registration with the Portuguese financial system, paying taxes on rental income, and maintaining fiscal records. Income from Local Alojamento (Alojamento Local) is taxed under category B (business activity), with many investors utilizing the so-called flat-rate system (regime simplificado), which allows for taxation of only a specified percentage of income.

For foreign investors, an AL license is the key to legally and profitably operating short-term rentals in Portugal. A properly prepared property registered under the Local Alojamento (Alojamento Local) system becomes a fully-fledged investment asset, generating steady income in popular tourist areas, while also providing legal peace of mind and security amid increasingly restrictive regulations in the Portuguese real estate sector.