Madeira continues to grant new Alojamento Local licenses.

If you are planning to purchase a home in Madeira that you are not going to use as your main residence or invest in rental property, you can offer the property to tourists as a short-term or vacation rental. In Portugal, this activity is known as “Alojamento Local”.

Madeira, also known as the Peal of the Atlantic is one of the most sought-after tourism destinations in Europe. With direct flights from most major European and UK cities, a year-round temperate climate and a comparatively low cost of living, Madeira has elevated its status from the retiree-all-inclusive destination to an island popular with younger travellers, digital nomads and adventure tourism.

With year-round demand, Madeira is an excellent choice for those looking to invest in property and see a return on their investment through short-term lettings.

In 2023, as a result of the housing crisis in Portugal, the Portuguese government introduced a habitation programme called ‘Mais Habitação‘. The aim of the measures was to reduce the impact that short-term rental property was having on the Portuguese population.

As a result, the issuance of new Alojamento Local licenses in high-density population areas, including Porto, Lisbon, and the Algarve has been suspended indefinitely.

Low-density population areas, including Madeira and the Azores, are exempt from these changes.

This change in the law allows investors from over-seas to continue to invest in Madeira, with the ability to apply for Portuguese Residency, with property purchase or investment over €500,000 Euros, commonly known as the Golden Visa scheme.

Other incentives, such as Madeira International Business Center - The MIBC or Zona Franca da Madeira, and Non-habitual Residency status, offer significant tax incentives for overseas investment.

As a result, Madeira continues to promote investment in the region by allowing the continuation of Alojamento Local.

Off Limits Madeira can work with you to legalise your property and apply for your Alojamento Local license, even if you are out of the country. Our professional and experienced team work on your behalf to register and operate your Alojamento Local business, so you can focus on the more important things in life.

If you want to arrange a call, or a free at-home consultation, contact a member of the Off Limits Madeira team today, and discover how we can take your vacation rental property to the next level.