Attention AL Investors: Portugal Enforces Mandatory Insurance, Threatens License Cancellation
Foreign investors with short-term rental (Alojamento Local - AL) properties in Lisbon, Cascais, and the Algarve must ensure immediate compliance with a strictly enforced insurance law. Municipalities are actively notifying owners who have failed to register their mandatory liability insurance, giving them a 10-day deadline to comply or face the cancellation of their rental license.
What Foreign Investors Need to KnowWhile the requirement for liability insurance has existed since 2018, a 2024 legal update now mandates the submission of the policy to the national AL registry. This has led to a crackdown, with approximately 17,000 owners rushing to register in recent weeks. According to Eduardo Miranda, president of the national AL association (ALEP), the process is being taken very seriously by local councils. "This isn't a suggestion, it's a legal obligation with severe consequences," stated a legal consultant specializing in property law. "For an investor, losing your AL license means a complete halt to your rental income stream."
Actionable Steps for Today's Buyer- Immediate Verification: Check your status on the Registo Nacional do Alojamento Local (RNAL) platform immediately to confirm your insurance is registered.
- Secure Compliant Insurance: If you are not insured or your policy does not meet the legal requirements for extra-contractual liability, secure a compliant policy from a Portuguese insurer without delay.
- Prospective Buyers: If you are purchasing a property to use as an AL, make proof of insurance registration a condition of the sale or factor the cost and process into your acquisition plan.
- Stay Informed: Regulations in the AL sector can change. Work with a local property manager or legal expert to stay ahead of any new requirements concerning taxes, safety, or licensing.
The message from Portuguese authorities is clear: the AL market is professionalizing, and non-compliance will not be tolerated. Explore opportunities with realestate-lisbon.com.
