Legal Requirements for Holiday Rentals in Portugal

March 2025

Portugal is a wonderfully diverse country that attracts both local and international tourists, offering an incredible mix of cultural, historical, and natural attractions. Whether it’s urban destinations, coastal retreats, or mountain escapes, Portugal has it all. This broad appeal makes holiday rentals a lucrative option for property owners.

According to Turismo de Portugal, as of August, the country boasted over 106,000 registered holiday rental units that met legal requirements. These are mainly concentrated in the Algarve, the Lisbon Metropolitan Area, and the North region.

Although holiday rentals can be highly profitable for Portuguese property owners, it’s essential to understand the relevant laws and legal requirements before getting started. Knowing the rules on registrations, taxes, requirements, and services can help you avoid problems and ensure a positive and profitable experience.

Publish your properties on Holidu

The Current Law and Holiday Rentals

In October 2023, regulations governing holiday rental properties underwent some changes. Here are some key points to bear in mind:

• All holiday rental properties must be registered.
• These rentals are classified as Category B (commercial activity), distinct from long-term rentals.
• The ASAE (Food and Economic Safety Authority) monitors compliance and can impose fines for violations.
• Individual landlords may face fines ranging from €50 to €750, while companies can be fined up to €7,500.

Step-by-Step: What to Know Before Renting Out a Holiday Home in Portugal

Understanding the legal requirements for holiday rentals will help you manage your property lawfully while avoiding unnecessary risks. Platforms like Holidu make this process easier and hassle-free.

1. Register Your Holiday Home

In Portugal, independent holiday rentals are registered as Alojamento Local (AL), a category covering short-term, paid accommodations (less than 30 days). This includes houses, flats, hostels, and even individual rooms.

To begin, submit a prior notification to your local council via the Balcão Único Eletrónico platform. If there’s no opposition within 10 days, you’ll receive a registration number. Within 30 days, the local council will inspect the property to ensure it meets the requirements.

Key Requirements for Registration:

• Proper upkeep of the property and its equipment.
• Windows or balconies with direct access to the outdoors.
• Availability of hot and cold water.
• Fully furnished and equipped premises.
• Adequate hygiene and cleanliness.
• Ensuring guest safety and privacy (e.g., proper locks, light-blocking shades, ventilation, and sanitary facilities).
• Availability of a fire extinguisher, fire blanket, first aid kit, and emergency contact details (e.g., 112) in accessible and visible locations.

2. Tax and Financial Considerations

You’ll need to register within the tax office. Earnings from holiday rentals (up to 30-day stays for tourists) are taxed under Category B.

Other taxes to consider include VAT and property tax (IMI), which may vary depending on your municipality and annual income. If your annual income exceeds €200,000, hiring a certified accountant and maintaining organised accounts will also be necessary.

3. Get Insurance for Your Property

As a holiday rental owner, you’re legally responsible for potential damages suffered by your guests. A civil liability insurance policy is mandatory and should cover:

• Property and non-property damages caused to guests or third parties.
• Fire damage.

This insurance is critical to protecting both you and your guests and helps safeguard your property registration.

4. Handle Formalities

Holiday rental properties must have:

• A complaints book for guests to formally lodge complaints.
• An information book in Portuguese, English, and at least two other foreign languages. This should outline house rules and provide useful tips for guests.

Additionally, all AL properties must display an AL identification plaque, except for standalone houses.

5. Report Guest Stays to SEF

If you host foreign guests — and you probably will — you’re required to report their stays to SEF (Serviço de Estrangeiros e Fronteiras). This must be done within three working days of their check-in or check-out. Reporting can be done online via the Accommodation Bulletin Information System or in person at SEF, GNR, or PSP offices.

Other Considerations

• If your property is part of a multi-owner building, local laws may require approval from more than 50% of property owners (based on share value) to use your property as a holiday rental.
• Condominium owners can also impose an additional charge (up to 30%) for common area maintenance costs.
• You’re allowed to rent out a maximum of seven holiday properties. However, some municipalities may impose restrictions on areas already saturated with AL properties.

Now that you’re familiar with the key legal requirements for holiday rentals, you’re well-equipped to start earning from your property. Platforms like Holidu can make this process even simpler, connecting your home or flat with thousands of users searching for the perfect spot for their next holiday in Portugal.

Publish your properties on Holidu