Lisbon to Permanently Ban New Airbnb-Style Rentals in Key Neighborhoods
For foreign investors in Lisbon's property market, the window of opportunity for new short-term rentals is closing. The city has already blocked 400 new license applications since November under a temporary freeze, and is now preparing a new regulation that will make the ban permanent in most of the city's prime real estate zones.
What Foreign Investors Need to KnowThis is the most significant regulatory change to impact Lisbon's lucrative 'Alojamento Local' (AL) market in years. The new rules will completely prohibit new licenses in the most popular tourist parishes, including Misericórdia, Santo António, and Santa Maria Maior. A real estate investment strategist in Lisbon stated, “This is a game-changer. An existing AL license will become an incredibly valuable asset overnight. Properties that already have a license will command a significant price premium, as the supply of legal short-term rentals will be permanently capped.” The city-wide ratio of ALs is already over the proposed limit, meaning the ban will likely be comprehensive.
Actionable Steps for Today's Buyer- Prioritize Properties with Existing Licenses: If your strategy involves short-term rentals, you must now focus exclusively on properties that already possess a valid AL license. This should be your number one criterion.
- Verify the License: Conduct rigorous due diligence to ensure the AL license is valid, active, and transferable with the property sale. Do not take a seller's word for it.
- Re-evaluate Your Strategy: If you cannot acquire a property with a license, you must pivot your investment strategy. Consider mid-term or long-term rentals, which are not subject to these restrictions and are in high demand.
- Act Now: The value of licensed properties is expected to increase significantly once the new regulation is formally approved. The market may see a surge in demand for the limited number of available licensed properties.
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