End of new Alojamento Local licences: Why long-term shared housing is becoming the standard in Lisbon and Porto in 2026

2026 marks a real turning point for real estate in Portugal. If you are a host in Lisbon or Porto, you have undoubtedly followed the recent legislative upheavals surrounding short-term holiday rentals with attention, and perhaps some anxiety. The golden age of Alojamento Local 2026 as we have known it is well and truly over in saturated urban areas. Faced with increasingly strict regulations and constant administrative pressure, many investors are looking for a secure exit route.

At Roomlala, we support hundreds of hosts every day in this transition. We are observing a clear and massive trend: the strategic shift towards long-term room rentals. Whether to accommodate students or young professionals, shared housing is establishing itself not only as the best alternative to holiday rentals in Portugal, but also as an economic model that is often more profitable and tax-optimised. Let us dive into the details of this change together and discover why renting your rooms long-term is the wisest decision this year.

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Alojamento Local 2026: The end of a holiday rental golden age in Lisbon and Porto?

To understand the current situation, it is crucial to clear up a common misunderstanding. Many hosts still think that the freeze on licences is due to the famous Mais Habitação Portugal law. However, it is important to clarify that the national block imposed by this law was largely revoked by the new government at the end of 2024. The real challenge today no longer comes from the central state, but rather from the municipalities themselves.

In 2025 and 2026, cities like Lisbon and Porto took over by introducing their own Municipal Regulations for Alojamento Local (RMAL). These regulations have created 'zones of absolute contention' in historic neighbourhoods and city centres, effectively banning the issuance of any new AL licence. If you own a property in these areas and do not yet have a licence, short-term holiday rental is simply no longer a legal option.

Even for those who already have a licence, the pressure remains immense. Admittedly, the extraordinary tax on Alojamento Local (CEAL) has been abolished, offering a small breather. However, municipal monitoring has increased drastically. Strict quotas are maintained, and town halls no longer hesitate to cancel a licence outright in the event of repeated complaints from the neighbourhood about noise. The risk of seeing your holiday rental business stopped overnight is naturally pushing hosts to rethink their profitability strategy.

The boom in long-term rentals: Ultra-advantageous 2026 taxation

Faced with restrictions on tourism, the Portuguese government has put in place massive incentives to bring real estate properties back onto the residential market. The new 2026 tax package (Decreto-Lei no. 97/2026) radically changes the game for hosts. At Roomlala, we believe this is the ideal time to review your operating model.

The moderate rent scheme: An unbeatable tax rate

The flagship measure of this new decree is undoubtedly the creation of the so-called 'moderate' rent scheme. If you agree to cap the total rent of your property at a maximum of 2,300 euros per month (which is more than enough for a large majority of apartments, even in shared housing), your income tax (IRS) rate drops dramatically.

Instead of being taxed at the standard rate of 25% on your rental income, you benefit from a fixed rate of only 10%. This 15-percentage-point tax cut directly increases your net return. It is an exceptional opportunity for hosts who want to stabilise their income without suffering the burden of conventional taxation.

Let us take a concrete example: for an apartment generating 2,000 euros of rental income per month, the tax savings made thanks to this 10% rate represent several thousand euros at the end of the year. This fiscal incentive largely compensates for, and even exceeds, the sometimes fluctuating and heavily taxed income of old-fashioned Airbnb rentals.

IRS reductions based on lease duration: A premium for stability

If your property does not fall within the criteria for moderate rent, or if you prefer a different approach, the government has also strengthened the benefits linked to the duration of leases. The longer you commit to the long term, the less tax you pay. This is the principle of the degressive IRS reduction for standard long-term rental contracts.

Here is how these benefits are structured in 2026:

• 5 to 10-year contracts: The IRS rate is reduced to 15% (instead of 25%).
• 10 to 20-year contracts: The rate drops to 10%.
• Over 20-year contracts: The rate reaches an exceptional floor of 5%.

These long contracts offer absolute peace of mind. No more time-consuming management of check-ins, check-outs, and fortnightly cleaning. You sign a lease, you benefit from reduced taxation, and you guarantee the sustainability of your real estate investment.

Renting out your rooms in shared housing: The ultimate alternative to holiday rentals in Portugal

Now that the tax framework is set, how can you concretely maximise the profitability of your property? The answer is simple: shared housing. Rather than renting your empty apartment to a single family, renting each room individually furnished represents the most effective alternative to holiday rentals in Portugal in 2026.

Firstly, renting out rooms (student shared housing or coliving for young professionals) completely escapes tourist quotas and municipal contention zones. You do not need an AL licence to rent a room for a period of 6 months, 1 year or more. You are within the scope of residential rental, perfectly in line with municipal regulations.

Secondly, the gross profitability of an apartment rented by the room is mechanically higher than that of a conventional rental. A T3 apartment (three bedrooms) rented as a whole could bring you 1,200 euros per month. By renting these same three rooms separately, furnished and equipped, at 500 euros each, you reach 1,500 euros, all while staying under the 2,300 euro threshold to benefit from the 10% IRS rate!

Finally, the risk of non-payment is diluted. If one of your housemates decides to leave, you continue to receive rent from the other rooms while you look for a replacement. At Roomlala, we facilitate this search by connecting you with a community of reliable and verified tenants.

Case studies: How to succeed in your transition with Roomlala in 2026

Moving from Alojamento Local to long-term shared housing can seem daunting, but with the right strategy, the transition is seamless and extremely rewarding. Here are two use cases that we frequently encounter at Roomlala.

Renting a student room in Porto: An ultra-dynamic market

Porto is a premier university city. Every year, thousands of domestic and international students are desperate for housing. Renting a student room in Porto has become a rock-solid market.

Take the case of João, owner of a T4 in the Bonfim district. Faced with the impossibility of obtaining an AL licence in 2025, he decided to convert his property into student shared housing. He equipped each room with a desk, good Wi-Fi, and comfortable bedding. By offering 10-month leases (the academic year), he ensures an occupancy rate of 100% from September to June.

By publishing his listings on Roomlala, João was able to select serious students, often with solid guarantors. He benefits from reduced taxation, no longer has to worry about complaints from neighbours about the nuisances of passing tourists, and takes advantage of his summers to carry out minor maintenance work.

Long-term rental in Lisbon: Capturing young professionals and digital nomads

In Lisbon, the ideal target for shared housing is turning more towards young professionals, expatriates, and digital nomads who are settling for 1 to 3-year assignments. The long-term rental in Lisbon for this audience requires a slightly higher standard of quality: neat decoration, user-friendly common areas, and modern equipment.

Maria owned a beautiful apartment in Arroios, formerly operated as an AL. Tired of the daily management and worried about the new regulations from the Lisbon town hall, she transformed her property into a high-end coliving space. She now rents her rooms with 5-year contracts, allowing her to drop her tax rate to 15%.

Thanks to the Roomlala platform, Maria manages her rentals with complete peace of mind. We help her showcase her property, secure bookings, and easily enter into contracts with her tenants. She has found peace of mind, while maintaining a net yield equivalent to, or even higher than, her best years in holiday rentals.

In conclusion, 2026 does not signal the end of real estate investment in Portugal, quite the contrary. It marks the advent of a healthier, more sustainable model supported by extremely incentive-based taxation. If you want to take the plunge and turn your regulatory constraints into financial opportunities, join the Roomlala community and start renting your rooms today!