Legal Requirements for Renting a Property in the Algarve (AL Licence)
Introduction: Renting Your Algarve Property the Legal Way
Renting out your house or apartment in the Algarve can be highly profitable, especially with Portugal’s booming tourism industry.
However, before listing your property on Airbnb, Booking.com, or Vrbo, you must first obtain an AL licence (Alojamento Local).
This licence is mandatory for all short-term rentals (typically stays of less than 30 days). Without it, owners face heavy fines and even suspension of rental activities.
👉 In this article, we’ll explain:
What the AL licence is,
How to apply for it,
The legal obligations once you have it,
And why working with a professional Algarve property management company like Algarve Coastal can make the process easier and safer.
What Is the AL Licence (Alojamento Local)?
The Alojamento Local licence, or AL, is the official authorisation that allows a property to be rented short-term to tourists in Portugal.
It applies to:
Apartments,
Houses or villas,
Private rooms within your main residence,
Or small guesthouses / holiday complexes.
This regime is governed by Portuguese law (Decree-Law 128/2014, amended by Law 62/2018) and regulated by the local City Hall (Câmara Municipal) of the area where the property is located.
Who Needs to Apply for an AL Licence?
Anyone offering short-term holiday accommodation (less than 30 consecutive days) to tourists must hold a valid AL licence.
That includes:
Individual property owners,
Companies (LDA, holding, etc.) operating tourist rentals,
Concierge or management services renting on behalf of owners.
Even if you rent your property for only a few weeks a year, the licence is still mandatory.
How to Obtain an AL Licence in the Algarve
Where to Apply
Applications are submitted to the local City Hall (Câmara Municipal) — for example, in Lagos, Portimão, Albufeira, Faro, Tavira, or Vila do Bispo.
You can apply:
Online via the official Balcão Único Eletrónico portal: eportugal.gov.pt
Required Documents
Copy of your passport or ID card,
Title deed or valid rental contract (if subletting),
Floor plan of the property,
Energy certificate,
Portuguese tax number (NIF),
Liability insurance,
Declaration of business activity with the Portuguese Tax Authority (Autoridade Tributária).
Processing Time and Cost
Average processing time: 15–30 working days, depending on the city hall,
Administrative fees: typically €0–150,
The AL number (e.g., AL/12345) must be displayed on the property façade and on all online listings.
Legal Obligations Once You Have the AL Licence
Once your AL licence is issued, several ongoing legal requirements apply.
Safety Standards
Your property must include:
A fire extinguisher,
A first aid kit,
Clearly visible emergency and safety instructions,
A smoke detector (mandatory).
Guest Registration
Every guest must be reported to SEF (Serviço de Estrangeiros e Fronteiras) via the SIBA platform.
Professional property managers like Algarve Coastal handle this process automatically for their clients.
Mandatory Signage
You must display a visible plaque showing:
The “Alojamento Local” designation and your registration number.
Tax Compliance
Rental income must be declared to the Portuguese tax authorities:
Category B (business income) for residents,
Non-resident income category for foreign owners.
Most professional managers provide an annual revenue summary to simplify your tax filing.
Penalties for Non-Compliance
Renting without an AL licence or breaching regulations can result in:
Fines up to €4,000 for individuals,
Up to €40,000 for companies,
Suspension of rental activity or closure of the property.
Platforms like Airbnb and Booking.com may also remove your listing if the AL registration number is missing.
Why Use a Professional Property Management Company
A local Algarve property management company such as Algarve Coastal makes the entire process simple and compliant:
Assistance with AL licence application and documentation,
Handling all legal and tax obligations,
Ensuring safety and SEF registration compliance,
Optimising your rental performance through professional listing, pricing, and guest management.
With expert help, you rent legally, stress-free, and profitably.
Conclusion: The AL Licence — Your Key to Legal and Profitable Rentals
Obtaining an AL licence isn’t just a formality — it’s a mark of professionalism, legality, and guest trust.
By staying compliant, you avoid penalties, protect your investment, and build a stronger rental reputation.
👉 If you want to rent your Algarve property legally and worry-free,
contact Algarve Coastal for complete assistance:
AL registration,
Compliance setup,
Full rental and guest management services.
