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Can I rent out my property in Portugal? Here’s what you should know

 

Whether you own a holiday home, an investment apartment, or a countryside villa, renting out your property in Portugal is a great way to earn passive income. Especially in popular regions like the Algarve and the Alentejo. 

But before you hand over the keys to your first guests, there are a few important things you should know.

 

 

Do You Need a Rental Licence?

 

Yes — if you're planning to rent out your property short-term in Portugal (as a holiday rental), you’ll need to apply for a Local Lodging Licence, known in Portuguese as Alojamento Local (AL).

Here’s what that means:

  • You register your rental activity with the local tax office (Finanças)
  • You prepare your property as it must meet safety, hygiene and equipment requirements. 
  • You register your property with the local town hall (Câmara Municipal)
  • You will receive an inspection date from the townhall for them to inspect your property. 
  • You’ll receive an AL number that must appear in all your publications

If you're renting long-term (more than 30 days per tenant), different rules apply — and you may not need an AL licence, but you do need a formal lease agreement.

 

 

Are there restricted areas where new rental licenses are prohibited?

 

In November 2024 the government gave the authority to each council to determine if they want to impose restrictions for new rental licenses for properties located in a condominium (e.g. apartment blocks and holiday resorts). Our advice: always check with the local council if there are any restrictions. 

Good news; if you purchase a property that already has a rental license it is now possible again to transmit the rental license from seller to buyer’s name. 

 

 

What About Condo Rules and Neighbours?

 

If your property is part of a condominium (e.g. apartment blocks), the condo board may limit or restrict AL licences.  Check the building’s regulations and seek approval if needed.

Also, ensure that your guests are respectful of neighbours — noise complaints can lead to fines or licence cancellations.

 

 

Do You Have to Pay Tax?

 

Yes. Rental income is taxable in Portugal, whether you’re a resident or not. You’ll need a Portuguese NIF (tax number) and must declare your rental income annually.

 

 

Short-term rentals (AL):

 

  • Taxed at a flat rate (currently 25% for non-residents, applied to 35% of gross income)

  • Requires VAT registration for non-residents and VAT -registration for non-residents depends on the height of the rental income (new rules applied since July 1st 2025). 

 

 

Long-term rentals:

 

  • Taxed at progressive rates or a flat 28% for non-residents

  • Some deductions are allowed (e.g. maintenance costs)

Always consult a local accountant to ensure full compliance.



 

Can Someone Manage the Rental for You?

 

Absolutely — and this is where things get easier.

Preparing your property for rentals, property promotion, managing bookings, cleaning, maintenance, guest communication, and check-in/check-out can be time-consuming, especially if you're living abroad.

 

That’s where a trusted local rental partner like Portucasa makes all the difference.

 

 

Portucasa: Your Local Partner for Holiday Rentals

 

Portucasa is an experienced rental company specialising in short-term holiday lets across the Algarve. Portucasa can take care of:

✔️ Preparing a property for rentals
✔️ Property promotion and managing bookings
 ✔️ Guest communication and check-in/check-out
 ✔️ Cleaning, laundry, and maintenance
 ✔️ Calendar and pricing management
 ✔️ Full transparency and monthly reporting

 

If you're looking for a worry-free way to rent out your home in Portugal, Portucasa can handle the details while you enjoy the income.

 

👉 Learn more about rentals and management with Portucasa

 

Final Checklist

 

  • Get your Portuguese NIF (if you don’t have one)
  • Find properties you like 
  • Check local council and condo rules (if applicable)
  • Purchase your property 
  • Open your rental activity at the tax office 
  • Prepare your property for inspection and rentals 
  • Apply for an AL licence (for short-term rentals)
  • AL-inspection by local townhall
  • Receiving your AL-license 
  • Set up your tax reporting or choose an accountant 
  • Choose a reliable rental partner like Portucasa

Your property in Portugal can do more than sit empty — it can generate income.


 And with the right support, it doesn’t have to be a headache; it can be something you enjoy!

 

 

Considering renting it out?


 👉 Contact Portucasa and find out how they can help and turn your home into a successful rental.