Holiday let licensing

Insights into what is involved in buying, selling & living in Portugal

Ways of keeping your habitation licence

This spring, for the third consecutive year, inspectors from Autoridade de Segurança Alimentar e Económica (ASAE) have fined agents and owners for holiday let related activities.

The licensing issue continues to generate controversy and confusion, among owners wanting to rent their properties to holidaymakers and agents wishing to serve this growing need.

Yet most people fail to grasp that the essence of the dispute lies in the type of property usage registration, rather than the actual licensing of the activity itself. The central issue in question is as follows. Is the property registered and authorised for residential (habitation) or commercial purposes (tourism)?

It should come as no surprise that in a country such as Portugal, tourist related activities are normally seen as commercial in nature, particularly when part of a tourist development. In a holiday complex with beach, golf, tennis, and swimming pools surrounded by a hotel, townhouses, apartments and villas, each of these accommodation options has an identical commercial purpose: tourism.

On the other hand, a housing development (urbanização) with a clearly stated purpose of providing living quarters for its residents may also have designated commercial areas for shops, restaurants or cafés.

Nevertheless, the dwellings of the development are clearly zoned as residential and non-permanent inhabitants, such as holidaymakers, are by no means excluded from being considered part-time residents, however short their stay might be.


For a property to be required to have a specific licence when letting to tourists, it must be considered part of a tourist development (empreendimento turístico) and deemed to be a complementary element to tourist lodging, engaged in the activity of providing tourist lodging services as defined in the legislation.

Outside of these parameters, lets to holidaymakers fall under the general renting law (Regime de Arrendamento Urbano – RAU) and follow basic norms of standard rental activities, with the notable exception that no minimum rental period is stipulated in the legislation, nor is a written contract required when lets are for less than six months.

If your letting is more commercial in nature rather than residential, a third option may be appropriate: hospedagem (guest house). In this case, you may need this property licence, which permits both private use as well as commercial tourist lets. The type of property licence is defined in local câmara legislation and will vary from township to township.

None of these three options fully address the actual activity practised by most owners, which is letting self-catering villas and apartments. Given this basic inadequacy in the legislation, it should not come as a surprise that ASAE inspectors have their own narrow reading of legislation, which often disregards the fundamental aspects of the law. It also confuses central licensing issues and the economic activity that they are allegedly trying to regulate. Therein lays the controversy.

However, if owners are guilty of other flagrant compliance violations, such as no Portuguese income tax declaration, IRS, as is sometimes the case, agents and owners may have difficulty mounting a proper defence and refuting the possible misinterpretation of the statutes.

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