Executive Summary
What changed in the short-term rental rules, how to register an AL in Madeira, and the Funchal apartment limits every buyer needs to check first.
Start With the Licence, Not the Listing
In Madeira, a short-term rental is only legal once it holds a valid Alojamento Local (AL) registration. The registration number is the title that lets you open to guests and advertise — and it must appear on every listing.
Get the licensing question answered before you buy, furnish, or photograph anything. The order of operations is what separates a smooth launch from a stalled investment.
This is a practical overview, not legal advice. The rules moved twice in two years and Funchal is still finalising local detail, so confirm your specific case with a Madeira lawyer or licensing specialist before you commit.
What Changed Nationally
The restrictive 2023 housing law was largely rolled back by Decreto-Lei 76/2024, in force from November 2024. For owners, the practical effects are significant:
AL registrations are indefinite again — no five-year reassessment or expiry.
A registration is transferable when you sell, instead of dying with the transaction.
The extraordinary AL contribution (CEAL) was scrapped.
You no longer need up-front condominium consent to start an AL, except for hostels.
In short, the national baseline is friendlier than it was. The constraints that remain are local.
How Madeira and Funchal Differ
Madeira applies the national AL regime, adapted regionally, and adds its own statistical and tax layers. Two local realities matter most:
Funchal froze new AL registrations for apartments in multi-family (collective-housing) buildings from September 2025, extended it into 2026, and approved a new municipal AL regulation in June 2026 that keeps limits on apartments in those buildings. Detached houses (moradias) and rooms in your own home were exempt from the freeze. Always check the current Funchal regulation before buying an apartment to let.
Outside Funchal — municipalities like Calheta, Ponta do Sol, Ribeira Brava, Santa Cruz, and Câmara de Lobos — no equivalent suspension has been documented, which keeps moradias there an attractive, lower-friction licensing route. Confirm the local position at the time you buy.
How to Register an AL in Madeira
Registration is a prior communication (mera comunicação prévia) filed online through the Balcão Único Eletrónico, which issues your AL registration number. The municipality can inspect within 60 days. The essentials:
Confirm the property has a valid use authorisation for habitation and that AL is viable at that address.
Open the matching tax activity with Finanças (the relevant CAE codes) and gather your caderneta predial and ownership or lease title.
Choose the modality: moradia (a whole house), apartamento (an autonomous fraction), estabelecimento de hospedagem (rooms/hostel), or quartos (up to three rooms in your own home).
File the prior communication with capacity, the operator's details, and an emergency contact, then receive your registration number.
Register the establishment for regional tourism statistics as required, and put the number on every platform listing.
Standard AL is capped at 9 rooms and 27 guests, with capacity computed from the number of rooms.
The Safety and Operating Requirements
A serviced fire extinguisher and a fire blanket, accessible to guests.
A stocked, signposted first-aid kit and visible 112 emergency signage.
A complaint book (livro de reclamações) in both physical and electronic form.
A homologated identification plate at the entrance.
Mandatory civil liability insurance — under the 2024 rules, lacking valid insurance is grounds to cancel the registration.
Your Ongoing Obligations
Guest registration: file foreign-guest records (boletins de alojamento) via SIBA, now run by AIMA, within three business days of arrival.
Tourist tax: collect and remit the municipal tourist tax where it applies (for example Funchal and Câmara de Lobos, around €2 per guest per night).
Tax: charge VAT (12% in Madeira; no small-business exemption for non-residents) and report AL income under IRS Category B.
Condominium: in a shared building, an assembly can vote to oppose your AL on documented, repeated nuisance grounds, so manage guest behaviour proactively.
The Bottom Line
Licensing is the first gate, not the last formality. In 2026 the national rules favour owners, but Funchal's apartment limits make the where and the what of your purchase decisive.
If you want certainty before you buy, we can run a licensing feasibility check for a specific address and tell you exactly what is — and is not — possible there.