In a bold move to bolster tourism and provide more accommodation options for visitors, Lisbon’s city hall has overhauled its short‑term rental regulations. The new policy, which reverses previous restrictive measures, is aimed at increasing the availability of lodging for tourists while balancing the city’s housing demands.
Until recently, Lisbon had imposed stringent rules on short‑term rentals, limiting their growth in a bid to reduce the pressure on the local housing market. However, these restrictions failed to achieve the desired outcome of lowering rental prices, leading to a rethink of the approach. In response, the city has decided to allow short‑term rentals to make up up to 10% of the housing stock in each neighbourhood. This decision is expected to give a fresh boost to Lisbon’s tourism sector, which has seen a significant increase in visitors over the past few years.
Lisbon’s iconic neighbourhoods, from the picturesque Alfama district to the bustling Baixa, are seeing a surge in tourists eager to explore the city’s unique charm. The easing of short‑term rental restrictions will undoubtedly enhance accommodation availability, making Lisbon a more accessible and attractive destination for global travellers. This policy shift aligns with Portugal’s national tourism objectives to promote sustainable tourism growth while ensuring that local residents and businesses benefit from the influx of tourists.
The updated regulations follow changes at the national level, where Decree‑Law 76/2024 granted municipalities more autonomy to define their own approach to short‑term rental controls. Previously, Lisbon had enforced a moratorium on new rental licences in an effort to curb the expansion of short‑term rentals. This decision was part of broader housing policy measures aimed at addressing affordability issues. However, these restrictions had little impact on overall housing costs and were viewed by many as detrimental to the city’s growing tourism sector.
Under the new policy, short‑term rental operators must still register their properties with the Alojamento Local (AL) system, which is the official regulatory framework for short‑term rentals in Portugal. This system ensures that all rental properties meet certain standards of safety and comfort, and it allows the city to keep track of the number of properties being used for short‑term accommodation. Property owners must also pay a tourism tax, which helps fund public infrastructure and services that benefit both residents and visitors.
Tourism Stakeholders React Positively
Tourism stakeholders have welcomed the new regulations, recognising the importance of providing more lodging options in a city that has become a global hotspot for travellers. According to the Portuguese Tourism Board, the country’s popularity as a destination has been steadily growing, with Lisbon seeing record-breaking visitor numbers in recent years. The increase in short‑term rental properties will help meet the growing demand for accommodation, especially during peak tourist seasons when hotels often reach full capacity.
The decision to ease restrictions also provides an opportunity for local businesses to tap into the tourism boom. Short‑term rentals create a ripple effect in the economy, benefiting not only property owners but also local cafes, restaurants, and shops that cater to the needs of visitors. In fact, many visitors prefer short‑term rentals over hotels for their authenticity, flexibility, and often more affordable rates.
While the new policy is designed to benefit tourists, it also aims to address concerns from local residents. The city’s new approach allows for greater control over the distribution of short‑term rentals, ensuring that their concentration does not overwhelm residential areas. This balance between tourism and community interests is central to the city’s long-term vision of sustainable growth.
Challenges Remain for Property Owners
For property owners, the new rules come with both opportunities and challenges. While the relaxation of restrictions opens the door for more rentals, it also means that property owners must comply with updated licensing requirements and safety standards. The Alojamento Local licence, which was previously difficult to obtain in some parts of the city, is now more accessible, though owners still face a thorough application process to ensure compliance with Lisbon’s regulations.
Additionally, Lisbon’s tourism tax, which is levied on all short‑term rental stays, helps fund public services but also adds a layer of complexity for property owners to manage. However, for those who meet the requirements, the potential rewards of entering the lucrative short‑term rental market remain significant.
Looking to the Future
Lisbon’s revised short‑term rental policy signals a more balanced approach to managing tourism growth. By allowing for an increased share of the market to be dedicated to short‑term rentals, the city is better equipped to meet the needs of both residents and tourists. As Lisbon continues to attract millions of visitors each year, this new policy will help ensure that the city remains a vibrant and dynamic destination for years to come.
The changes to Lisbon’s short‑term rental rules reflect a growing recognition of the importance of the tourism sector to the city’s economy. The policy adjustment allows for greater flexibility in the accommodation market, providing more options for visitors while keeping the city’s housing issues in check. By maintaining a sustainable balance, Lisbon is positioning itself to thrive as a top European travel destination.
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