Right-Wing Parties Block Repeal of Government’s AL Changes

January 27, 2025

In a significant political move, Portugal’s right-wing parties—PSD, Chega, IL, and CDS-PP—have blocked attempts by the left-wing opposition to revoke recent government reforms to the Alojamento Local (AL) short-term rental sector. The vote, which took place on January 24, 2025, reflects ongoing tensions over Portugal’s housing crisis and short-term rental regulations.

Parliament Votes Against Repeal of AL Reforms

The repeal proposals, introduced by PS (Socialist Party), BE (Bloco de Esquerda), and Livre, were defeated with the combined opposition votes from PSD, Chega, IL, CDS-PP, and independent deputy Miguel Arruda. Meanwhile, the left-leaning parties PS, BE, PCP, Livre, and PAN supported the repeal effort.

The debate on the Alojamento Local (AL) regulations took place on January 23, 2025, where right-wing lawmakers criticized the Socialist Party’s (PS) handling of the housing crisis during its previous tenure in government.

Left-Wing Arguments: Restricting AL to Address Housing Shortages

During the heated discussion, PS lawmaker Maria Begonha emphasized that the Socialist Party never opposed Alojamento Local as a business model but argued that Portuguese cities need a “pause to breathe” and carefully assess their municipal housing plans to make balanced, territory-specific decisions.

Similarly, BE leader Mariana Mortágua strongly opposed further liberalization of short-term rentals, calling it “absurd and an attack on those struggling to find housing in the cities where they work.”

Representing Livre, Isabel Mendes Lopes criticized the current government’s approach, labeling the AL decree “a mistake” and claiming that Portugal is out of sync with international housing policies. She stressed that “all measures that help curb this housing emergency are essential.”

Government’s AL Reform: Decreto-Lei n.º 76/2024

The current government, led by Prime Minister Luís Montenegro, approved Decreto-Lei n.º 76/2024 on August 22, 2024, introducing new regulations for Alojamento Local after consultations with regional and municipal authorities.

Key changes included:

Municipal Regulatory Authority:
Municipalities are empowered to approve regulations specific to Alojamento Local operations within their territories, allowing for tailored approaches to local housing dynamics.
Establishment of ‘Local Accommodation Ombudsman’:
Municipalities can appoint an ombudsman to mediate disputes between residents, AL operators, and other stakeholders, aiming to promote best practices and resolve conflicts amicably.
Capacity Limitations:
The decree sets a maximum capacity for AL establishments (excluding certain types) at nine rooms and 27 guests, with provisions for additional beds under specific conditions.
Insurance Requirements:
AL operators are required to maintain insurance policies covering risks associated with their operations, ensuring adequate protection for guests and properties.
Enhanced Municipal Oversight:
Municipalities have the authority to conduct inspections and enforce compliance, with the ability to suspend or cancel AL registrations in cases of non-compliance.

For a comprehensive understanding of the decree, you can access the full text here: Decreto-Lei n.º 76/2024

Right-Wing Opposition: AL is Not the Problem

Right-wing parties rejected the left-wing proposals, arguing that stricter AL regulations would not solve Portugal’s housing crisis. Their main points included:

Housing shortages are due to lack of supply, not AL growth.
The Socialist government failed to address housing affordability during its administration.
Restricting AL would harm tourism-dependent cities such as Lisbon, Porto, and the Algarve, impacting local businesses and the economy.

By blocking the repeal, PSD, Chega, IL, and CDS-PP reinforced their stance that further regulation of AL would be counterproductive and that the housing crisis requires structural reforms, not short-term rental restrictions.

What’s Next for Alojamento Local in Portugal?

With the repeal attempt failing, the government’s AL policies remain in place, ensuring that municipalities maintain control over short-term rental permits. However, given the ongoing debate between housing affordability and tourism-driven real estate demand, further legal challenges or new policy shifts in the future are possible.

Stay tuned for more updates on Portugal’s real estate and housing policies!