Lisbon Cancels 40% of Short-Term Rental Licences in Major Cleanup
Lisbon's city council has cancelled roughly 40 percent of all Alojamento Local (AL) licences in the capital -- some 6,765 out of approximately 19,000 registrations -- after determining that the properties behind them were inactive or never operating.
Lisbon's city council has cancelled roughly 40 percent of all Alojamento Local (AL) licences in the capital -- some 6,765 out of approximately 19,000 registrations -- after determining that the properties behind them were inactive or never operating.
The mass cancellation, reported by Diario de Noticias and confirmed by the municipality, targeted so-called "ghost licences": registrations kept on the books long after properties had been sold, converted to long-term lets, or simply abandoned as short-term rentals. Under regulations introduced in March 2025, all AL operators must present proof of civil liability insurance. Those that failed to comply had their registrations revoked.
A Distorted Picture
Eduardo Miranda, president of the Portuguese Short-Term Rental Association (ALEP), said the phantom registrations had been inflating the true size of the market for years. "Many owners maintained the registration but were not using the property for this purpose. In several cases, properties were sold without the licence ever being cancelled," he told Diario de Noticias.
The implication is significant. Much of the political debate around housing affordability in Lisbon has been shaped by headline figures suggesting the city is overrun with short-term tourist accommodation. If a substantial share of those licences were dormant, the actual pressure from active rentals may have been overstated -- though the housing crisis itself remains very real.
A National Audit
The cleanup will not stop at Lisbon. The process is expected to extend across Portugal, with ALEP estimating that only around 90,000 of the country's 126,000 registered AL units are genuinely active. That would mean roughly 36,000 licences nationwide -- nearly 29 percent -- are similarly inactive.
For anyone renting property in Portugal, whether as a landlord exploring the short-term market or a tenant competing for limited long-term housing stock, the data correction matters. It should produce a more accurate baseline from which to measure the real impact of tourism rentals on residential availability -- and, potentially, inform more targeted regulation rather than blanket restrictions.
The move also sends a practical signal to property owners: maintaining an unused AL registration is no longer cost-free. Those who let their insurance lapse or fail to demonstrate active use risk losing their licence, with re-registration likely subject to whatever tighter rules may follow.
Lisbon's housing market remains one of the most pressured in southern Europe, with rents continuing to climb despite successive government interventions. Whether the cleanup changes the political arithmetic around short-term rentals -- or simply sharpens it -- remains to be seen.
