Lisbon Cracks Down: 400 Short-Term Rentals Rejected as City-Wide Bans Loom for Investors
Foreign investors focused on Lisbon's profitable short-term rental (Alojamento Local - AL) market face a critical regulatory shift. The city has rejected nearly 400 new AL applications since a temporary ban began, and with a new, stricter regulation on the horizon, the window for new investment in prime areas is closing permanently. This crackdown makes existing, licensed AL properties more valuable than ever.
The upcoming Municipal Short-Term Rental Regulation (RMAL) will introduce total bans on new licenses in Lisbon's most sought-after parishes, fundamentally altering the investment landscape.
What Foreign Investors Need to KnowThe new rules will create 'containment zones' across the city. Entire parishes like
Misericórdia (including Bairro Alto), Santa Maria Maior (Alfama, Baixa), Santo António (Avenida da Liberdade), and Estrela will be off-limits for new AL licenses. "This is a pivotal moment. The city is drawing a line in the sand to preserve residential housing," stated a municipal source. This policy will create a finite, and therefore more valuable, supply of legal short-term rental properties in these core zones. The city has also identified 273 illegal rentals, signaling a new era of strict enforcement. Actionable Steps for Today's Buyer- Acquire Existing Licenses: The most viable strategy is to purchase properties that already hold a valid AL license. This is now a key asset that will command a significant premium.
- Verify License Legitimacy: Given the crackdown on illegal operations, perform rigorous due diligence to ensure the AL license associated with a potential property is fully compliant and transferable.
- Explore Fringe Neighborhoods: Identify neighborhoods that fall just outside the proposed total ban zones. These areas are likely to see the next wave of tourism growth and property appreciation as supply in the city center is capped.
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