Amendment to Lisbon’s Municipal Regulation on Short-term Letting

On December 2, 2025, the Lisbon Municipal Assembly approved the second amendment to the Municipal Regulation on Short-term Letting (“MRSL”). This amendment was subsequently published in the Official Gazette of the Republic of Portugal through Notice 29926-A/2025/25 of December 5 (the “Notice”). The amendment aligns the municipal regime with national amendments introduced by Decree-Law 76/2024 of October 23 (“Decree-Law 76/2024”). (See our post Amendments to short-term letting regime.) It also strengthens local management instruments with new rules addressing territorial delimitation, exceptional authorization, registration transferability, and suspension and reactivation mechanisms in containment areas.

The amendment enters into force on December 6, 2025, one day after the Notice is published in the Official Gazette of the Republic of Portugal.

These amendments to the MRSL apply to ongoing procedures on that date, while safeguarding acts already carried out under requests for exceptional authorization or prior checks for operating real estate under the short-term letting (“SL”) regime.

Also, a transitional rule specifies that restrictions on new registrations for real estate acquired through municipal, parish or local business auctions in the Municipality of Lisbon will apply only to purchases made after the amendment enters into force.

The updated regulation defines containment areas using three additional scales:

• Municipality
• Parish
• Neighborhood

The ratios between SL establishments and permanent dwellings (“PD”) will be monitored monthly, based on data from the National Statistics Institute.

New classifications include the following:

• Absolute containment areas: These are identified when the SL/PD ratio equals or exceeds 10%. Classifications can occur at municipal, parish or neighborhood levels. Currently identified parishes include Santa Maria Maior (66.9%), Misericórdia (43.8%), Santo António (25.1%), São Vicente (16.1%), Arroios (13.5%), and Estrela (10.8%).

• Relative containment areas: These apply when the ratio falls between 5% and 10%. Relative containment applies at parish or neighborhood levels and does not duplicate if the parish is already classified as an absolute containment area.

Annex IV to the MRSL lists areas subject to containment rules. These areas are reassessed every two years but may be updated by the council based on monthly monitoring.

In both absolute and relative containment areas, new registrations are generally prohibited. However, the Lisbon Municipal Council may authorize exceptions when:

• registrations pertain to the rehabilitation of ruined buildings or the complete rehabilitation of buildings that have been vacant for over three years; and

• properties are considered of special interest to the city, forming part of multifunctional use buildings where short-term letting property is included in a local social or cultural development project, or include affordable rental housing under the Municipal Regulation on the Right to Housing.

Also, in relative containment areas, exceptions may apply to new registrations if:

• they are categorized as “room” rentals in a separate house or apartment, or part of a property with two or more bedrooms, provided the landlord has maintained the property as their primary residence and tax domicile for over three years.

However, these exceptions are subject to the following quantitative limits:

(i)   One room-category SL unit in apartments with two bedrooms.

(ii)  Two room-category SL units in properties with three or more bedrooms.

New registrations will not be allowed if the real estate:

• was subject to a residential rental contract within the previous five years, unless the tenant submits the registration request; or
• was purchased at a municipal, parish or local business auction within the Municipality of Lisbon after the date the amendment entered into force.

Exceptional authorizations are granted with the following limited deadlines:

• Five years, nonrenewable while the containment classification remains in effect.
• One year, renewable for successive periods for the “room” category, provided the requirements regarding residence, tax domicile and quantitative limits continue to be met.

While Decree-Law 76/2024 has removed the national non-transferability rule established in the More Housing Program, Lisbon’s MRSL imposes a significant restriction in absolute and relative containment areas. Specifically, the regulation limits the transfer of registrations in the “house” and “apartment” categories if these transfers result in the registration expiring. However, this limitation applies without affecting the legal exceptions established in the Legal Regime on Operating Short-term Letting Establishments.

Practically, in containment areas, transferring ownership of the registration may lead to expiration. This can directly affect the asset’s value and reshape transaction planning. As we highlight in out Post, this municipal rule implements the option for municipalities to impose specific conditions on transferability within high-pressure areas.

Lisbon’s MRSL creates a “bridge” mechanism allowing the temporary conversion into housing. Specifically, registration holders may suspend SL operations for up to five years by submitting evidence of a real estate rental contract or a promissory contract.

At the end of the suspension period, the holder may request reactivation of the SL registration under terms similar to those that applied before the suspension. However, reactivation is subject to the updated SL/PD ratio. If the area remains classified as a containment area, reactivation requests will only be granted once the ratio no longer justifies containment. Requests are processed in a waiting list, based on their order of entry.

The amendment reaffirms condominium rules established nationally under Decree-Law 76/2024. Specifically, it allows a condominium owners’ meeting to request the mayor to cancel an SL registration due to repeated noise disruptions that infringe on residents’ right to rest. However, such a request must include a reasoned resolution approved by more than 50% of the building’s ownership.

The municipality is strengthening inspections in collaboration with administrative and police authorities. It also requires SL registration numbers to be displayed in advertisements and on digital platforms.

Regarding usage, the amendment clarifies that supplementary uses (e.g., commerce, services, restaurants, and bars) are not permitted in SL establishments, except for cases explicitly allowed under the national regime.

• Existing registrations remain valid and do not have an expiration date under the national regime discussed in our Post.
• In containment areas, the municipal rule tying expiration to the transfer of registration in the “house” and “apartment” categories affects the ability to transfer registrations. Essentially, this rule impacts “the circulation” of the asset or registration, not its current validity.
• The new rule making properties ineligible for new registrations if they have been subject to a rental contract in the past five years does not affect existing registrations. Instead, it acts as a barrier to new registrations.
• Registration holders seeking to convert properties temporarily into residential rentals can suspend their SL registration for up to five years. However, resuming SL operations in a containment area depends on whether the ratio evolves sufficiently to lift containment.
• Based on the above, we recommend that owners and investors in Lisbon:

(i)           conduct thorough mapping of containment areas at the parish and neighborhood levels and monitor municipal updates;

(ii)          account for the fact that transferring a registration within the “house” and “apartment” categories in containment areas will result in its expiration; and