In recent years, Portugal has experienced a surge in tourism, particularly in cities like Lisbon and Porto, leading to a boom in short-term rental accommodations under the Alojamento Local (AL) system. However, with the implementation of the Mais Habitação program, the landscape of AL is undergoing a significant transformation. This initiative aims to address housing shortages and affordability issues by encouraging property owners to switch from short-term rentals to long-term rentals. We will explore the key changes introduced by the Mais Habitação program and the benefits of making the transition to long-term rentals.
Changes Under the Mais Habitação Program:
Suspension of issuing new licenses for Local Accommodation in the main zones of mainland Portugal. The rule does not apply to the Azores and Madeira.
New Tax on Local Accommodation (CEAL) set at 15%, reducing the revenue for property owners.
Revalidation and expiration of licenses during the year 2030.
Condominiums with more powers. By a resolution of at least two-thirds of the permillage of the building, it is possible to oppose the exercise of local accommodation activity in a unit of a building.
The program, launched by the Portuguese government, aims to strike a balance between tourism and the local housing market. Focused on creating more housing opportunities for residents, the program introduces measures to regulate the Alojamento Local sector. One of the key aspects is the encouragement of property owners to convert short-term rentals into long-term rentals, contributing to the overall supply of affordable housing.
Benefits of Switching to Long-Term Rentals:
Stable Income Streams:
Long-term rentals offer property owners a more stable and predictable income stream compared to the seasonality of short-term rentals. This stability can be particularly appealing for those seeking financial security and a consistent return on their real estate investment.
Lower Maintenance:
With guests staying for longer periods, properties experience less frequent turnover, resulting in reduced wear and tear. This can lead to lower maintenance costs and less time spent managing the property.
Community Integration:
Long-term rentals contribute to community stability by fostering a sense of permanence among residents. Property owners who transition from short-term to long-term rentals play a crucial role in creating a more cohesive and vibrant local community.
Enhanced Tenant Screening
Long-term rental agreements empower landlords to conduct more thorough tenant screening processes. By comprehensively assessing potential tenants, the likelihood of accommodating problematic individuals who may cause property damage or delay rent payments is significantly reduced.
Alignment with Local Housing Needs:
The program emphasizes the importance of addressing the housing needs of local residents. By switching to long-term rentals, property owners can actively contribute to alleviating housing shortages and improving housing affordability in Portugal.