Anyone weighing an Airbnb-style investment in central Lisbon needs to update their assumptions again. Following a municipal purge of thousands of inactive licences earlier this year, the Câmara Municipal de Lisboa (CML) has redrawn its containment map with far more granularity — and far less room for new entrants — than existed even twelve months ago.
What changed, and when
The current framework traces back to the Regulamento Municipal do Alojamento Local (RMAL), definitively approved by Lisbon’s Municipal Assembly on 2 December 2025, replacing the older parish-wide system with a two-tier model of absolute and relative containment zones, now assessed down to individual neighbourhoods rather than whole parishes. The Lisbon Municipal Assembly definitively approved on December 2, 2025, the new Municipal Short-Term Rental Regulation (RMAL), marking a decisive step in redefining the rules applied to the sector.
Then, in February 2026, the city concluded a sweeping administrative clean-up: the Lisbon City Council concluded the process of canceling AL registrations due to lack of proof of mandatory insurance—a legal requirement that thousands of owners had not fulfilled, with 6,765 registrations canceled, leaving 11,774 active. Many of the cancelled listings turned out to be dormant paperwork rather than live businesses — “phantom registrations”: properties that never operated or that had already ceased activity without canceling their registration in the RNAL.
That clean-up had a knock-on effect on the containment map itself. Because several parishes’ AL-to-housing ratios fell once dead licences were stripped out, the CML revisited its zoning in April 2026. Following the cancellation of 6,765 registrations due to lack of insurance, the containment levels in Lisbon have been revised.
The map today
Under the current classification, three parishes sit under absolute containment, where new AL registrations are essentially barred: Santa Maria Maior, Misericórdia, Santo António. A further three — São Vicente, Arroios, Estrela — were downgraded to relative containment, while Avenidas Novas moved out of relative containment altogether. But the picture is more textured than a parish list suggests: the RMAL now evaluates individual neighbourhoods too, and 22 neighbourhoods sit under absolute containment and 11 under relative containment, a first for the regulation.
The thresholds themselves have also been tightened. Absolute containment now applies wherever the ratio of AL units to permanent housing reaches 10%, with relative containment covering the 5–10% band — down from the previous 20%/10% split. Santa Maria Maior sits at approximately 66.9%, Misericórdia at 43.8%, Santo António at 25.1%, São Vicente at 16.1%, Arroios at 13.5%, and Estrela at 10.8%, according to municipal data. Citywide, the ratio currently stands at 7% — with the city currently at 7.2%, this is a real possibility in the future for the whole municipality to tip into a single, city-wide absolute containment zone, which would freeze new licences everywhere, not just in the historic core.
Why it matters for foreign buyers
The practical sting for overseas investors is less about new applications — those were already all but impossible in the centre — and more about what happens to existing licences. In absolute and relative containment zones, an apartment or moradia AL licence expires when the property is sold, and the buyer cannot inherit the registration. The only exceptions are inheritance, transfers between spouses, and family reorganisation. In plain terms: buying a Lisbon city-centre apartment with an active AL licence does not give the buyer any right to continue operating it as a short-let property.
CML has also confirmed the freeze is real in practice, not just on paper: the city has since confirmed it has issued zero new AL licences following this purge. Since short-term rentals still represent 67% of Lisbon’s tourist accommodation, demand for the shrinking pool of transferable licences is unlikely to soften.
There is one narrow opening for residents rather than investors: a new “room” modality permits hosts to let 1 room in a 2-bedroom, 2 rooms in a 3+ bedroom owner’s primary residence, aimed at supplementing household income rather than building a rental portfolio.
What to watch next
Monitoring is now continuous rather than periodic — the ratio is monitored monthly by the CML’s monitoring division, meaning a zone’s classification can change from one month to the next. That cuts both ways: a neighbourhood could tip into containment as fast as it dropped out. Foreign buyers eyeing rental income in the historic centre should treat any advertised AL licence as non-transferable until proven otherwise, budget for the possibility of the city-wide freeze triggering, and check the current ratio for the exact address — not just the parish — before signing anything. Outer districts such as Benfica, Lumiar and Olivais remain comparatively open for now, though nobody in Lisbon’s rental market is betting on “for now” lasting long.
Buyers weighing a purchase in Lisbon with a rental component in mind should treat AL income as a bonus, not a given, and get professional advice tailored to the specific parish and building before committing. For background on the wider tax and residency picture that shapes property decisions in Portugal, see our tax & NIF and relocation hubs, and browse our services page for support navigating the paperwork.
Sources
This article was produced with AI assistance and editorial oversight in line with our editorial policy. It is general information, not legal or tax advice.