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Portugal: Lisbon has moved to reverse its long-standing restrictions on short-term rentals, allowing new licences to be issued following evidence that previous controls failed to improve housing affordability.
The decision follows years of limitations introduced in 2019, which restricted new short-term rental registrations in much of the city. Under the revised framework, local authorities will now allow short-term rental activity to account for up to 10% of housing stock in designated areas.
The move comes as data shows that housing affordability in Lisbon did not improve despite the restrictions. According to figures cited by Airbnb, average house prices in the Lisbon metropolitan area have nearly doubled since the rules were introduced, while rental prices have continued to rise at pace. Over the same period, hotel prices in the city increased by around 30%.
The revised approach aims to strike a balance between housing supply and tourism demand, allowing residents to rent out properties while maintaining oversight at a local level. The updated rules also reflect broader concern that blanket bans on short-term rentals have failed to address housing shortages in major cities.
Airbnb welcomed the decision, saying the move would support local residents, encourage responsible hosting and help ease pressure on traditional accommodation supply.
Under the revised framework, municipalities will retain control over short-term rental thresholds, while homeowners will be permitted to operate within defined limits. The new approach is expected to take effect following final legislative approval.
Highlights:
Lisbon has lifted restrictions on short-term rentals after rules failed to improve housing affordability
New framework allows short-term lets to make up to 10% of local housing stock
Housing and hotel prices continued to rise under previous restrictions
City joins other European markets reassessing strict short-term rental limits
