Amendments to short-term letting regime

Effective from November 1, 2024, Decree-Law 76/2024 of October 23 (“Decree-Law 76/2024”) introduces significant changes to the legal regime for short-term letting establishments.

Decree-Law 76/2024 revokes and amends several measures previously established in the More Housing Program (Law 56/2023—see point 3 of the Practical Guide | More Housing Program). Specifically, it lifts the suspension on new registrations, alters the validity and transferability of registrations, and grants new powers to municipalities.

Decree-Law 76/2024 revokes several measures introduced by the More Housing Program (Law 56/2023), including the following:

• Lifting the suspension on new registrations: The general suspension on new short-term letting registrations for apartments and accommodation establishments within a separate part of a building has been lifted.

However, municipalities can still suspend new registrations for properties in containment areas or sustainable growth areas (as defined below).

• Reappraisal and validity of registrations: Registrations issued when the More Housing Law entered into force no longer require reappraisal in 2030. Decree-Law 76/2024 also revokes the five-year validity period, which was renewable for equal periods. Consequently, registrations no longer have an expiration date.

Has the registration of short-term letting establishments ceased to be personal and non-transferable?

Contrary to what was stipulated in the More Housing Program, registrations:

• No longer expire with the transfer of ownership of the registration, termination of operations, leasing, or any other form of change in operational ownership; and
• Remain valid even with the transfer of any part of the share capital of the legal holder of the registration.

However, municipalities can still set limits on the transferability of new registration numbers for “house” and “apartment” categories located in containment areas.

What new powers have been granted to municipalities?

Municipalities now have the power to:

• Approve specific administrative regulations for short-term letting in their territories; and
• Designate containment areas and sustainable growth areas, defined as follows:

1. Containment areas: Areas with an excess of short-term letting establishments, justifying restrictions on new establishments.
2. Sustainable growth areas: Areas requiring special monitoring and follow-up measures to prevent future excesses.

Municipalities with over 1,000 registered short-term letting establishments must decide within 12 months whether they will exercise these regulatory powers.

In containment areas and sustainable growth areas, municipalities can prohibit new registrations of short-term letting establishments in buildings or apartments that have been subject to housing rental contracts in the two years before the registration.

Even if they do not prohibit them outright, municipalities can still set conditions and limits on new registrations as regards their duration and allocation rules.

Until the administrative regulation enters into force, the municipal assembly can suspend new registrations in designated areas for up to one year.

Even if the condominium deed or regulation does not prohibit short-term letting, the following resolutions can be approved:

• Prohibition of short-term letting: The creation or amendment of the condominium regulation to prohibit short-term letting must be approved by a two-third majority of thepercentage ownership of the building. .
• Opposition to the short-term letting of a specific apartment: The opposition must be justified and approved by more than half of the building’s property owners, based on repeated actions that disrupt the normal use of the building or cause inconvenience to other condominium owners. Previously, the More Housing Law required approval from two-thirds of the property owners for such an opposition.

Revoking the suspension of new registrations and allowing the transfer of registrations without expiration dates provide more flexibility and legal certainty for short-term letting license holders.

However, with the new powers granted to municipalities, short-term letting license owners must closely monitor municipal regulations over the next year. Municipalities with over 1,000 registered short-term letting establishments must decide by November 2025 whether to regulate this activity. Until the municipal administrative regulation enters into force, the municipal assembly can suspend new registrations in designated areas for up to one year.

Therefore, paying attention to municipal resolutions and regulations is essential to ensure compliance and maximize investment opportunities in short-term letting.