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Portugal: The Portuguese Government has introduced a new decree-law that will revoke some of the short-term rental restrictions brought in by the previous Socialist government’s ‘Mais Habitação’ [More Housing] programme.
Decree-law 76/2024, which was published on Wednesday and will come into effect on Friday [1 November], will specifically revoke mandatory short-term rental licence renewals and restrictions on new registrations. Instead, the power to make decisions on licences and registrations will be given back to municipal councils, allowing them to better meet the demands of the local communities that they serve.
In addition, the decree-law will undo the automatic expiry of inactive licences and the planned re-evaluation of existing licences in 2030, condominiums will no longer have the “absolute power” to approve, cancel or deny licences without justification, and the government has clarified valid use cases and operational guidelines for short-term rentals [or alojamento local – AL – in Portugal].
Last year, the Portuguese Government put an end to its contentious ‘golden visa’ scheme and introduced a ban on new licences for short-term rentals as part of a €900 million package of measures designed to alleviate the country’s housing crisis.
The country has had to combat rising rent and housing prices in recent years, exacerbated by inflation rates of more than eight per cent.
On top of that, Portugal’s ‘golden visa’ programme, which offered EU passports to non-EU nationals in return for investments including in real estate and had been criticised in the past for contributing to soaring house prices and rents, was discontinued by the government. The scheme had brought in a reported €6.8 billion in investment to the country, with a significant portion of the money being diverted into real estate, but that led to criticism and protests from housing groups about the growing shortage of available and affordable housing supply.
However, the landscape shifted when Socialist Prime Minister António Costa stood down at the end of 2023 amid corruption allegations, and centre-right Democratic Alliance leader Luís Montenegro succeeded him in a snap election in March.
Then in August, the newly-formed government proposed the reversal of short-term rental restrictions and changes to the legislation introduced by the ‘Mais Habitação’ package.
In response to the news, Portuguese short-term rental industry association ALEP [Associação do Alojamento Local em Portugal] welcomed the government’s decision, saying that it was “the result of more than a year of work”. It added that some of the restrictions would have “suffocated a large part of the sector” and that “there was no other alternative than to revoke the measures”.
Meanwhile, the Portuguese Association of Hotels, Restaurants, and Similar Establishments [AHRESP] also praised the move by saying that it would bring a more balanced and appropriate approach to short-term rentals.
The association said that the decree-law would offer operators “increased legal certainty and business stability” and that short-term rental businesses would now be able to invest and grow without the ongoing threat of sudden licence cancellations due to factors outside of their control.
