Renting your Algarve villa or apartment to tourists is one of the most common ways to make a Portuguese property pay for itself. It is also one of the most regulated.

To do it legally on Airbnb, Booking, Vrbo or any other platform, you need an Alojamento Local licence Algarve owners cannot skip.

This guide explains who qualifies, how registration works, what changed under Decree-Law 76/2024, where municipal containment zones apply, how income is taxed, and the practical rules that keep your registration alive.

If you are still weighing the operating model itself, read our companion piece on short-term vs long-term rental strategy first.

What is Alojamento Local and who needs it

AL is the legal regime for any property offered for short-term paid lodging to tourists, defined under Decree-Law 128/2014 and amended by Decree-Law 76/2024.

If you let your Algarve property by the night, the week, or any period under 30 days, you fall under AL. Long-term residential leases (arrendamento habitacional) are a different regime and do not need this registration.

The law recognises four modalities:

• Moradia (Villa) – a standalone house used for short-term rental

• Apartamento (Apartment) – a unit inside a multi-family building

• Estabelecimento de hospedagem (Accommodation facility) – hostels and serviced rented rooms

• Quartos (Rooms) – up to three rooms inside the host's own home

Moradias and apartamentos cannot exceed nine bedrooms and thirty users.

How to register: RNAL, town hall, and the 60-day clock

Registration runs through the Balcão Único Eletrónico do Empreendedor (BUE) at eportugal.gov.pt. The process is a comunicação prévia (prior communication) addressed to the mayor of the municipality where the property sits.

You upload the caderneta predial and licença de utilização, proof of identity and Portuguese tax number (NIF), and the owner's authorisation if you are not the proprietor.

Once submitted, the town hall has 60 days to oppose. In municipalities that have approved áreas de contenção (containment zones), the window extends to 90 days.

If the municipality does not reject the file inside that period, tacit approval applies and Turismo de Portugal issues the RNAL number in the format XXXXX/AL.

That number must appear on every online listing and on the mandatory placa identificativa at the property entrance.

What Decree-Law 76/2024 changed

The 2024 reform reversed most of the restrictive measures introduced by the 2023 Mais Habitação law. From 1 November 2024:

• Registrations no longer expire after five years. They remain valid indefinitely unless cancelled.

• Licences are again transferable with the sale or inheritance of the property, except in containment areas where municipalities can impose conditions.

• The freeze on new apartment-AL registrations was lifted nationally.

• Condominium assemblies can no longer unilaterally cancel a registration. They may object by a vote of more than 50 percent of the permilage, citing documented disturbance, and the case goes to municipal review.

• The CEAL (extraordinary contribution on AL) and the 120-day seasonal limit were both revoked.

• Mandatory civil liability insurance was reinforced. Minimum cover is €75,000 and the policy must remain active. The RNAL now displays the policy expiry date, and a lapse triggers automatic cancellation.

For the broader compliance picture (deeds, NIF, capital gains, IMI, IMT, Stamp Duty), keep our legal and tax guidance hub bookmarked.

Algarve municipalities and containment zones

The Algarve has the highest concentration of AL in the country. As of late 2025, Albufeira leads with around 9,967 registered establishments, followed by Loulé with 6,871 and Lagoa with 3,747.

Under DL 76/2024, each municipality writes its own rules for áreas de contenção and the new áreas de crescimento sustentável.

Local picture worth knowing before you buy or register:

• Lagoa is the most advanced. Edital n.º 117/2025 opened public consultation on a Regulamento Municipal para o Crescimento Sustentável do Alojamento Local, drawing on the framework of DL 76/2024.

• Albufeira has publicly discussed containment areas but has not formally approved a definitive map at the time of writing.

• Loulé applies a sectoral approach in saturated centres such as the historic core and parts of Vilamoura.

• Smaller inland and eastern Algarve councils (Tavira, São Brás de Alportel, Castro Marim) remain broadly open.

Always confirm the current municipal regulation before you sign a deed. A property that ticks every box today can sit inside a future contenção zone twelve months later.

Income tax: the simplified regime, and why the address matters

Most individual AL owners are taxed under Category B (business income) of IRS, simplified regime, when annual gross revenue stays below €200,000.

The taxable base is set by applying a coefficient to gross income:

• 0.35 for moradias and apartamentos outside containment zones

• 0.50 for the same properties inside containment zones

In practice, the unit's address can change the effective tax bill by tens of percent. The simplified regime also expects 15 percent of gross income to be backed by deductible expenses (depreciation, IMI, condomínio, repairs, platform fees, accountant). VAT applies at 6 percent on accommodation services.

Operating through a company (Lda.) is normally only attractive above €200,000 turnover, with full corporate tax (IRC) and organised accounts.

The right structure depends on revenue, holding period, and exit plan, and should be decided with a Portuguese accountant before you register.

The operating rules that keep your registration alive

Even with a clean RNAL, ongoing obligations are real and easy to miss:

• AL plaque at the entrance

• Active civil liability insurance, minimum €75,000

• Livro de Reclamações (complaints book), physical and digital

• Fire extinguisher and fire blanket in the kitchen, first-aid kit, emergency contacts in at least Portuguese and English

• Internal regulations posted in the property (house rules)

• Reporting guest stays to SEF/AIMA via the SIBA portal within three working days

• Issuing electronic invoices through a certified system and filing IRS Category B returns

Penalties for operating without a licence range from €4,500 up to €40,000 per infraction for legal persons. Platforms will have to remove listings without a verifiable RNAL once EU Regulation 2024/1028 enters full application during 2026.

FAQ

Do I need an AL licence to rent on Airbnb in the Algarve?

Yes. Any paid stay under 30 days requires an active RNAL. Airbnb verifies the number on the listing.

Can a foreign owner apply directly?

Yes, provided you hold a Portuguese NIF and have access to the BUE portal. Most owners delegate the filing to a lawyer or accountant.

Is the AL licence still tied to the owner after a sale?

Since DL 76/2024 the licence travels with the property in a sale or inheritance, except where a municipal containment regulation says otherwise.

Can my condominium block my AL?

Not on its own. The assembly may object with a recorded vote above 50 percent of the permilage, citing proven disturbance, but the final decision sits with the municipality.

What happens if my insurance lapses?

The RNAL is automatically suspended and can be cancelled. Renewing the policy and re-registering it on the platform is the only way back.

Where ICON Property fits in

For buyers thinking about short-term rental as part of the investment case, the AL licence is rarely the deciding factor on day one and almost always the deciding factor on year five.

Choosing the right municipality, the right building, and the right unit type, with full visibility of the contention zone rules, is what separates a property that funds itself from one that stalls.

ICON Property works with owners and investors across Albufeira, Loulé, Lagoa, the Golden Triangle and the eastern Algarve.

We match each brief to a property that fits today's regulation and tomorrow's strategy, and we connect clients with lawyers, accountants and licensed AL operators that keep everything compliant.

Browse Algarve properties or talk to us directly.