Alojamento Local (AL) Licence Explained for Holiday Rentals in Algarve, Portugal

If you're considering renting out your property for short-term stays in Portugal, understanding the Alojamento Local (AL) licence is crucial. This official licence allows property owners to legally offer their properties for holiday rentals, ensuring that both the host and guests are protected. 

In this guide, we'll explain everything you need to know about the AL licence and why it's essential for holiday renters in Portugal.

What is the Alojamento Local (AL) Licence?

The Alojamento Local (AL) licence is a legal requirement for property owners who wish to rent out their properties to tourists or short-term holidaymakers. Introduced by the Portuguese government in 2014, the licence regulates the short-term rental market, ensuring properties meet safety, hygiene and quality standards. It applies to all types of rental properties, from apartments to villas and houses, in areas where short-term rental is allowed.

Why Do You Need an AL Licence?

If you plan to rent your property as a short-term holiday rental, having an AL licence is mandatory. Without this licence, you risk hefty fines and may face legal action. The AL licence not only ensures your property meets safety and quality standards but also provides peace of mind to renters who know they’re booking with a registered, legal property.

Types of Alojamento Local (AL) Accommodation

1. Home AL: A self-contained house for short-term rental.
   
   

2. Apartment AL: A portion of a building or house, rented independently.
   
   

3. Co-housing Establishments (including hostels): Properties with shared rooms, where the predominant unit is a hostel. If the property predominantly operates as a hostel, it may be referred to as such, provided it meets the specific criteria laid out by Portuguese regulations. New guidelines introduced in February 2021 (Decree No. 262/2020, November 6) apply to hostels, establishing further requirements for this type of accommodation.
   
   

4. Rooms: Individual rooms rented within the owner’s primary residence, with a maximum of three rooms available for rent.

Key Benefits of the AL Licence for Holiday Renters

1. Legality and Protection: By obtaining an AL licence, you ensure your property is legally compliant, protecting both you and your guests. Guests can also feel more secure knowing they are staying in a regulated and approved property.
   
   

2. Tax Obligations: Registering your property with an AL licence makes you eligible to pay the appropriate taxes on your rental income. These taxes are typically less than those for other types of rentals, making it a straightforward process for property owners.
   
   

3. Quality Standards: The AL licence ensures that your property meets certain safety and quality standards. These include fire safety measures, proper sanitation, and adequate amenities, which are important to maintain a high level of guest satisfaction.
   

How to Obtain an AL Licence in Portugal

1. Register with the Portuguese Taxal Authorities
   Start by registering yourself as a sole trader with the business activity related to short term lodging.  You'll need to provide identification, your Portuguese fiscal number (NIF), the IBAN of an EU bank account, and unless you are a resident in the EU you will need to have or nominate a fiscal and VAT representative.
   
   

2. Ensure Your Property Meets Safety Requirements
   Your property must adhere to specific health and safety regulations. This includes having fire extinguishers, first-aid kits, signage displaying the national emergency number (112) and other required safety features. The property must also meet standards for cleanliness and comfort.
   
   

3. Submit Your Application
   After gathering all necessary documents and ensuring the property meets safety standards, submit your application for the AL licence. This can be done online via the Balcão Único Eletrónico or directly at the local Câmara Municipal.
   
   

4. Receive Your AL Licence
   Once your application is reviewed, you will be granted your AL licence. This licence must be displayed in your property listing.

AL Licence Requirements

- Property Registration: You must be the legal owner or have written permission from the property owner to register the property for holiday rental.

- Information Book: The property must provide a document outlining all building rules, including specific guidelines on waste disposal and noise levels. If there are written condominium regulations, these must also be included and made available to guests. The document must include the contact phone number of the person responsible for the rental and provide all key information in Portuguese, English, and at least two other foreign languages.

- Civil Responsibility Insurance (Specific to AL Rentals): This must now be submitted to the government website every year to keep the AL license valid.

- Fire Safety: Fire blankets and fire extinguishers are mandatory, and you may be required to submit a fire safety certificate.

- Hygiene and Sanitation: The property must meet hygiene standards, including clean water supply, waste disposal, and proper sanitation facilities.

- Availability: The property must be available to rent year-round (or at least seasonally, depending on the location).

AL Licence Costs

The cost of obtaining an AL licence varies depending on the location of your property and the type of rental. On average, the application fee can range from €50 to €200. Additionally, you may need to budget for costs associated with ensuring your property meets safety and hygiene standards.

What Happens if You Don’t Have an AL Licence?

Operating a short-term rental without an AL licence is illegal in Portugal. If caught, you can face fines, which can range from €300 to €3,000 for individuals and up to €18,000 for companies. The local authorities are vigilant in enforcing these regulations, so it's important to ensure you comply.

Conclusion

For holiday renters in Portugal, obtaining an Alojamento Local (AL) licence is essential for ensuring your property is legally and safely available to tourists. By following the registration process and meeting the required standards, you not only avoid legal risks but also enhance the guest experience. If you're thinking about renting your property as a holiday rental, taking the time to understand and obtain an AL licence is a key step in ensuring your business runs smoothly. Reach out to us for more information.