🏘️ Is Buying Property for Short-Term Rentals in Portugal Still Worth It?

Happy Sunday, beautiful people! 🏖

The most affordable place we could find for a night’s stay in Lisbon recently? A boat. And it was sinking. So much for the AL licence guaranteeing “safety and habitability” standards.

That little experience reminded me just how murky the world of short-term rentals in Portugal can be. Behind every listing is a maze of licences, location rules, taxes, and red tape. So this week, I asked the team at FRESH Properties to break it all down: what’s changed, what still works, and where the real opportunities are in 2025.

Also in this issue: If you normally breeze past the events section (Marina, I see you), don’t. I’ve pulled out the most exciting medieval festivals happening this month. Swords, costumes, castles, the whole shebang.

Later this month, we’re digging into big questions like: What happens when your NHR status runs out? And how do you avoid getting burned on Portuguese property taxes? So stay tuned!

Quick recap of what’s inside today:

🏘 The truth about short-term rental investments in Portugal

⚔ Must-see events in July (don’t miss the castles and costumes)

💬 A handy Portuguese vocab lesson for your next beach day

Let’s dive in, shall we?

Parque Natural da Arrábida is a protected area located on the Setúbal Peninsula, south of Lisbon, Portugal. Established in 1976, it covers approximately 17,600 hectares (about 43,500 acres), including over 5,000 hectares of marine area. The park is famous for its dramatic limestone mountains that rise sharply from the Atlantic Ocean, creating stunning cliffs, lush Mediterranean vegetation, and beautiful sandy beaches with clear turquoise waters. The highest point is Pico do Formosinho (501 meters), and the Serra do Risco boasts the highest coastal cliff on the Portuguese mainland, at 380 meters.

Festa Templária (Knights Templar Festival) (10-13 July, Tomar): a major annual event that celebrates the town’s deep historical connection with the legendary medieval Order of the Knights Templar. The festival is not just a fair; it’s a full historical reconstruction, honoring Tomar’s origins as the spiritual headquarters of the Knights Templar in Portugal. The Templars were responsible for building the iconic Convent of Christ, now a UNESCO World Heritage Site, and for shaping the city’s identity.

ARTBEERFEST (10-13 July, Caminha, Alto Minho region): Each year, Artbeerfest transforms Caminha into a “mecca for craft beer,” attracting thousands of enthusiasts from Portugal, Spain, and beyond. The event features hundreds of craft beers from national and international breweries, with past editions hosting more than 60 teams from 17 countries and offering 550 different beer styles. The festival is known for its eclectic and innovative program, including tastings, gastronomy, master classes, labshops, street entertainment, concerts, and performances.

Silves Beer Fest (15-19 July, Silves, Algarve): One of Portugal’s most iconic and long-standing beer festivals, returning to Praça Al-Mutamid in Silves. Visitors can enjoy dozens of craft beers from across Portugal, regional gastronomy, street food, and a lively handicraft market. The program features daily music shows, DJs, and entertainment, making it a vibrant gathering for both locals and tourists. The festival’s reputation as one of the best beer events in the country has only grown since its relaunch in 2017, now recognized as the top beer festival in the Algarve

Chefs on Fire Pop-Up Aveiro (18-20 July, Aveiro): an unmissable celebration of open-fire gastronomy, live music, and vibrant community spirit, all set against the picturesque canals of Aveiro. This unique festival brings together 12 acclaimed national and international chefs who create mouthwatering dishes—meat, fish, vegetarian, and desserts—over wood and flames, all included in a four-course tasting menu with your ticket.

Óbidos Medieval Fair (17-27 July, Óbidos): The fair transforms the walled town of Óbidos into a vibrant medieval village, complete with costumed actors, musicians, jousting tournaments, and bustling market stalls offering traditional foods and crafts. This year’s theme centers on the legendary love story of Pedro and Inês, with dramatic reenactments and storytelling bringing Portugal’s history to life. Visitors can enjoy live entertainment, medieval feasts, and a fully immersive atmosphere—no plastic cups, just wooden mugs and straw-covered streets—making it a magical and family-friendly event that feels like stepping straight into the Middle Ages

NOS Alive 2025 (10-12 July, Passeio Marítimo de Algés, Oeiras): Featuring a diverse lineup including Olivia Rodrigo, Kings of Leon, St. Vincent, Future Islands, Sam Fender, and Glass Animals, this festival is a highlight of Portugal's summer events.

Kylie Minogue – Tension Tour (15 July, MEO Arena, Lisbon): The pop icon returns to Portugal as part of her 'Tension Tour', performing hits from her latest album and classic favorites.

Candlelight Concerts in Lisbon: a magical live music experience where classical and contemporary hits are performed by talented musicians in some of the city’s most beautiful venues, all illuminated by thousands of candles. These concerts feature a wide range of tributes—from ABBA, Queen, and The Beatles to Coldplay, Metallica, and Hans Zimmer—reimagined by string quartets and other ensembles, creating an intimate and unforgettable atmosphere.

Swim Grand Prix or Swim GP (19-20 July, Cascais): a major open water swimming festival that combines intense competition with the stunning natural beauty of the coastline between Lisbon, Oeiras, and Cascais. The event is organized by 3 Iron Sports and is renowned for attracting swimmers from around the world to test their limits in open sea conditions.

Bragança Granfondo (July 13, Bragança): a vibrant annual cycling race offering three scenic and challenging routes (68 km, 94 km, and 129 km) through the beautiful Serra da Nogueira and surrounding villages. Known as the “liveliest granfondo in the world,” it blends tough climbs and stunning landscapes with local traditions, music, and festivities, making it a must-do event for cyclists of all levels who want to experience both athletic challenge and authentic Portuguese culture.

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So many of you have reached out with questions about buying property in Portugal specifically for short-term holiday rentals. With changing AL rules, tighter licensing, and shifting hotspots, it’s not always easy to know where to start.

So I turned to the pros at FRESH Properties for answers. They didn’t just cover the basics, they gave us real insight into what’s happening now, what to watch out for, and where opportunities still exist in 2025.

I hope you find this article as insightful as I did. If you’ve still got questions after reading, feel free to reach out directly to the friendly team at FRESH Properties. Or send them to me and we’ll put together another expert-answered guide soon.

Now, let’s dive into the key things you need to know before buying a short-term rental in Portugal.

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Portugal is still one of Europe’s most exciting places to buy property, especially for those thinking of turning a home into a short-term rental. With beautiful weather, steady tourism, and relatively good value in real estate (compared to much of Western Europe), it’s no wonder so many expats are exploring this as an investment opportunity.

But 2025 isn’t 2018.

Regulations have changed. Some doors have closed, others have opened, and it’s more important than ever to go into this process with a clear game plan.

Here’s what you need to know if you're thinking of buying a property in Portugal to rent out on Airbnb or similar platforms for short-term rentals (less than 3 months).

Let’s start with financing. Portugal doesn’t offer buy-to-let mortgages like some other countries. That means you can’t get a loan based on how much you expect to make from rentals. Instead, the bank will assess you as if you were buying the property to live in yourself. You’ll need to prove you can afford the mortgage using your current income and savings.

The good news? Once you’ve bought a property, you don’t need anyone’s permission to rent it out. But, to rent out a property in Portugal for any length of time, you will need to register for taxation in Portugal and declare the income.

If you’re planning to rent out your property for short-term or holiday stays, it’s important to apply for an Alojamento Local (AL) license. You’ll need this if you want to list your property on popular platforms like Airbnb, Booking.com, or VRBO, which are the go-to sites for tourists looking for local accommodation in Portugal.

An AL license not only ensures your property meets essential safety and habitability standards, but also increases visibility and credibility with potential guests through platform reviews and ratings — helping you attract more bookings.

The catch? These licenses aren’t always easy to get, especially in high-demand areas like Lisbon and Porto, where the local authorities have restricted new licenses in trying to address housing shortages for local residents. This applies mostly to the more densely populated areas like Lisbon and Porto.

There have been a lot of changes in the last couple of years, so here’s a quick update on the current landscape:

Lisbon: New AL licenses are frozen in most central and historic districts until at least October 2025. The city is trying to keep short-term rentals below 5% of the total housing stock in any area.

Porto: Also tightened restrictions, especially in popular tourist zones and historic neighbourhoods.

Other cities and towns: Several other municipalities have introduced similar limits. Always check with the local Câmara Municipal before you buy, to see what’s currently allowed.

Yes, but only since November 2024. If a property already has an AL license, that license can now be transferred to you when you buy it. This is a major plus and something to look for if you’re looking to buy an investment property to rent out for short-term lets.

Since the legal changes that happened in November 2024, condominium assemblies can no longer block AL licenses in the building unless the property is being used as a hostel or was originally registered as tourist accommodation in the building permit during construction. This change will strengthen your right, as an individual owner to operate short-term rentals in residential buildings, provided the property complies with all other AL requirements.

Properties located in classified ‘rural’ zones can be categorised separately from AL as Rural Tourism Properties. These are intended for country homes, farm stays and small inns, which by-pass potential AL freezes if registered under the Direção Regional de Turismo. Properties in this category must meet specific criteria such as architectural characteristics and location requirements.

Despite the tighter rules, Portugal remains a strong market for short-term rentals. Millions of tourists visit every year, and if you have a well-located property in a popular area, the returns, especially in high season, can be impressive.

Just keep in mind that if you're not planning to manage the property yourself, most management companies will charge between 20 - 30% of your rental income. That can eat into your profits, so review the numbers carefully.

Income from short-term rentals falls under Category B (business income) in Portugal’s tax system. You have two options for how you report it:

If Lisbon and Porto are off the table for now, here are some solid alternatives:

Buying in Portugal to run a short-term rental can still be a great move if you do it with your eyes open. The days of “buy now, ask questions later” are long gone. Today, it’s all about staying compliant, choosing the right location, and running the numbers.

If you’re thinking about investing in a short-term rental here in Portugal, feel free to reach out to FRESH Properties. We can help you find the right property and make sure you avoid costly surprises along the way.

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With thanks to our collaborator, Stephanie Box, Real Estate Consultant at FRESH Properties, for her valuable insights and contributions to this article.

For more information on all things property, you can reach out to Stephanie via email below. Alternatively, WhatsApp the surprisingly helpful AI Estate Agent, Pedro, for real-time answers to your questions.

📧 Email: [email protected]

✅ What’s your plan when your NHR time runs out?

✅ The real costs, taxes, and pitfalls of buying property in Portugal

✅ Plus: More insider tips for smarter expat living

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🏖️ Portuguese on the Beach: Listen & Repeat

Heading to the beach this weekend? This week’s mini Portuguese lesson from Portuguese Lab is all about beach vocabulary. Perfect timing as things start to warm up! It’s a listen-and-repeat format, so even if you’re just on your way to grab a pastel de nata, you can sneak in some practice.

Thanks for reading! 💌

Hustle on!

Angelique🧞‍♀️

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