From the more than 120,000 properties registered as Local Accommodation (AL) for short-term rentals in Portugal, only 75,000 showed proof of continued activity following a crackdown from the government.

Holders of AL registrations, which are necessary for properties to be listed on sites such as Airbnb and Booking.com, had until last week to provide proof that they are still running their short-term holiday lets or risk seeing them cancelled.

The new requirement saw AL owners having to provide all the documentation in time, which involved submitting their last periodic VAT declaration or tax declaration for IRS/IRC purposes. The only exception to this requirement were holiday lets in one's own permanent residence, provided that it doesn't exceed 120 days per year.

Until December 13th, only 74,972 valid contributory statements were submitted, mainly in the municipalities of Lisbon (19,917), Porto (8,581), Albufeira (6,565), Loulé (4,197) and Lagos (3,907).

This means that over one-third of existing AL registrations across the country are likely to be cancelled for exceeding the deadline, according to the data from the Portugal Tourism Office.

Part of the Mais Habitação law, which came into force in October and was also responsible for measures such as the end of the Golden Visa and Non-Habitual Resident regimes and other AL limitations, the new requirement was brought in to help fix the housing crisis, which the government believes has been fuelled by the short-term rental market.

So what does the latest requirement mean for those thinking about buying to rent? Get in touch with the Algarve Home Sales team for more information on the investment potential of buying property in Portugal.