A Window That's Still Open — But Won't Be Forever

If you're considering buying a property in Lagos, Praia da Luz, Burgau, or anywhere in the West Algarve with the intention of generating short-term rental income, there is one question you need to answer before you even book a viewing: Can you still get an Alojamento Local (AL) licence?

The answer, as of June 2026, is yes — but the window is open precisely because Lagos hasn't acted yet. And that distinction matters enormously.

What Changed in November 2024

Portugal's short-term rental landscape was dramatically reshaped by Decreto-Lei 76/2024, which came into force on 1 November 2024. This law reversed the deeply unpopular restrictions of the previous government's "Mais Habitação" package, which had frozen new AL registrations across much of the country and made licences personal and non-transferable.

Under the new framework:

• AL licences are now permanent — no more five-year renewals.
• Licences are transferable on sale — the registration travels with the property deeds (outside containment zones).
• New registrations are open across most of Portugal, subject to local municipal rules.
• The extraordinary AL tax (CEAL) was scrapped, retroactively from 31 December 2023.

The key shift: regulatory power now sits with individual municipalities. Each câmara municipal can declare its own "containment areas" — zones where new registrations are restricted or blocked entirely.

Lagos Has Not Declared Any Containment Areas

Here is the critical fact for West Algarve investors: Lagos has not published an AL regulation. No containment zones. No draft in public consultation. No suspension of registrations.

Compare this to neighbouring municipalities. Faro published its AL regulation in June 2025. Lagoa began its drafting process in April 2025 and has already imposed temporary suspensions in urban rehabilitation areas. Lisbon's December 2025 rules are the most restrictive in Portugal — closing most of the historic centre to new registrations entirely, with licences expiring upon property sale.

Lagos: silent. And that silence is doing real work for investors right now.

What this means in practice: new AL registrations for apartments (apartamento) and villas (moradia) are currently admissible everywhere in the Lagos municipality — Praia da Luz, Burgau, Meia Praia, the old town, Odiaxere, all of it — under the standard 60-day câmara opposition window.

The Algarve Advantage in 2026

The Algarve as a whole remains the most accessible region in Portugal for AL licensing. Despite hosting roughly 40,000 AL units — approximately one-third of Portugal's national total — the region has no binding regional freeze or unified containment framework. The Algarve's combination of strong tourist demand, open licensing, and competitive tax rates makes it the standout market for rental-income investors in 2026.

Key tax facts for non-resident AL operators:

• Under the simplified regime, only 35% of gross rental income is treated as taxable for apartments and villas.
• A flat 25% IRS rate applies to that taxable amount — producing an effective rate of approximately 8.75% on gross income.
• From 1 July 2025, non-resident operators must charge 6% VAT on guest stays and file quarterly returns through a Portuguese fiscal representative.

Three Things Investors Should Do Right Now

If your acquisition strategy depends on AL rental income in the West Algarve, here's what the current landscape means for you:

1. Register immediately after signing the escritura. Don't wait to renovate. The 60-day opposition window starts on submission — once granted, your licence is yours regardless of future municipal decisions.
2. Favour locations outside any likely future containment zone. If Lagos eventually acts, the pattern across Portugal has been to target dense historic cores first. Properties in Marina de Lagos, Meia Praia, Praia da Luz, Burgau, and Salema are well-positioned to remain admissible even if a regulation lands.
3. Prioritise transferability. Outside any future containment zone, your AL registration travels with the property at resale — a meaningful advantage over containment-zone properties, which carry a real liquidity discount.

The Bottom Line

The West Algarve's AL window is open today because Lagos hasn't moved yet — and that's a genuine, time-sensitive opportunity. The gap between "I bought with an AL licence" and "I bought intending to apply for one" is wider in mid-2026 than it has been in years.

For investors looking at the €400k–€800k apartment and villa band in Lagos, Luz, or Burgau, the rental income maths can work — but only if you act with intention. The door is open. Walk through it deliberately.

For the latest on Portugal's AL regulatory framework, visit ePortugal.gov.pt or consult the official Turismo de Portugal Alojamento Local guidance.