Portugal to Remove 40,000 'Ghost' Short-Term Rental Licenses from National Register
A third of the country's local accommodation (AL) units are at risk of being canceled by the end of the year for not having submitted proof of liability insurance, with dozens of municipal councils already contacting owners to proceed with cancellation orders. Of the total 126,000 ALs registered in the National Registry of Local Accommodation Establishments (RNAL), 70,000 have so far submitted this 'proof of life,' a mandatory step to ensure legal operation. This regulatory cleanup is expected to provide a more accurate picture of the short-term rental market, a sector often scrutinized for its impact on housing supply.
Eduardo Miranda, president of the Local Accommodation Association in Portugal (ALEP), stated that approximately 40,000 accommodations will ultimately be canceled. “There are 40,000 ALs that risk losing their license, and some in the short term, because they have already been notified,” he advanced to the press. The requirement to submit insurance documentation annually was reinforced by Decree-Law No. 76/2024, which revised rules established under the previous government's 'More Housing' package. This measure aims to eliminate so-called “ghost licenses” that inflate market statistics but do not correspond to active rental properties. For property owners, navigating these legal updates is essential for compliance.
The process, which started in March via the government's official portal, mandates that municipal councils issue a 10-day warning to non-compliant owners before a final cancellation order is executed. In Lisbon, the impact is expected to be substantial, with around 7,000 ALs, or 37% of the current 19,000 registrations, set to be canceled. In contrast, Porto shows a much higher rate of compliance, with 80% of owners having already submitted their proof of insurance. Miranda estimates that Porto will see only a 15% cancellation rate, attributing this success to the city's structured approach, which has included inspections of new registrations to prevent the accumulation of inactive listings.
In the Algarve, a region where 40% of the nation's AL properties are concentrated, the scenario is similar to Lisbon, with an expected 30% of licenses to be eliminated. The process in the south has been slower, as many municipalities have not yet begun the first phase of notifications. A significant challenge in this region is the high number of foreign or elderly owners who find the electronic submission process difficult. This has been a primary constraint that could lead to license forfeiture for a notable segment of the market. Understanding such location-specific issues is key for investors.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
Miranda explained that municipalities are now moving into the notification and cancellation phases. Despite some delays caused by recent local elections, he anticipates the process will normalize in the coming weeks. “Municipalities that were pioneers, such as Lisbon, should have the entire process concluded in November,” the ALEP president noted. The liability insurance itself has always been a mandatory component of operating an AL, covering both property and non-property damages to guests and neighbors, but the new law enforces its verification through an annual digital submission.
ALEP has been conducting an awareness campaign to guide property owners through the process. Miranda emphasized that the formal notification from the councils has been crucial. “That formal communication made all the difference because there is always that margin of people who are distracted, who don't pay attention and ended up not submitting the proofs and risked losing their licenses,” he affirmed. This “cleaning process,” as described by ALEP, will ultimately help calculate the true number of operational ALs in Portugal, removing registrations made impulsively, particularly during the period when the 'More Housing' program put a freeze on new licenses. Investors looking into this sector should consult resources on investment properties to better understand the evolving landscape.
Discover rental property opportunities and regulations at realestate-lisbon.com.