isbon in Portugal has been a favourite discovery of the easyJet age. It’s an affordable and safe European capital, filled with glossy tiles and amazing natural light, where the nightlife rocks and the food options are superb.
Those early weekenders who discovered the city were soon joined by digital nomads (the local tech start-up scene is one of the most established in Europe, with the Lisbon Digital Nomads Facebook Group currently boasting over 32,000 members), and then the celebrities moved in: Madonna, Michael Fassbender and shoe-supremo Christian Louboutin among them.
Interesting tax options on overseas income brought increasing numbers of wealthy international families – the French in particular – and big business also saw the appeal, with Google and Mercedes Benz among companies opening local tech centres.
How much does it cost?
Savills reports that between 2010 and 2020, prime property prices in Lisbon rose 98 per cent, second only to Berlin among European cities over that period.
Meanwhile, despite attempts to legislate the short-term rentals market, pre-Covid in 2020, a third of city centre properties in Lisbon were listed for short-term rental.
Now that Covid restrictions have been largely lifted, there has been a shift in what’s available. You can still get deals, but like in London, there’s just not that much on the rental market at the moment.
Typical rent for a quality three-bedroom property with some outside space – a balcony or terrace – in a good central location would cost between €3,000 to €5,000 a month (roughly £2,500 to £4,200), says Carlotta Pelikan of Athena Advisers, with rental prices peaking in Príncipe Real and Chiado. Escudo, Belém and Restelo represent relatively good value.
“In Lisbon, as there are very few tall buildings, prices vary almost as much depending on the views a property has as on its location,” says Pelikan. “Views and outdoor space are in high demand across the city. Rental demand is high in Lisbon for larger family homes, with a number of businesses relocating here. Most property across the city is smaller.”
HousingAnywhere, Europe’s largest rental accommodation website, reported in their International Rent Index for Q1 2022 that the average monthly price of a furnished one-bedroom apartment in Lisbon was €1,296, a 17 per cent year on year increase. For comparison, similar properties cost €1,978 in Paris and €1,940 in London.
What’s it like for Londoners who want to rent in Lisbon?
Frankie Reddin, 35, is a PR and communications consultant in the food and drinks industry. In November 2020, she traded Mile End for Lisbon, having also lived in north London and Manchester. Faced with a second lockdown in “grey, miserable London” and with the Brexit deadline at her heels, she decided to up sticks for the Portuguese capital.
“I arrived in a partial lockdown, eight months into the pandemic,” she says. “The lockdown quietness in Lisbon, a city which has come to rely on holiday rentals and Airbnbs, meant that I had quite a lot of choice, without too much pressure to commit to the first thing I saw.
“I actually now live in a former Airbnb flat in Rato by Campo de Ourique. I’ve had absolutely no trouble with getting things fixed. My landlord is super nice and relaxed, and there’s not that patronising or demeaning ‘landlord/tenant’ dynamic that we Londoners are all too familiar with.
“I’m enjoying the financial independence that living in Lisbon has afforded me and will never – if possible – go back.”
Sara Allen, 37 from Dorset, works in tourism sales. With her son Harry, 5, she has split her time between the UK and Portugal since 2016.
“When we first moved to Lisbon we needed somewhere easy to ‘land’,” says Sara. “We liked the central location of Chiado and chose a fully-furnished serviced apartment at Martinhal Chiado. It was a 75 square metre, two-bedroom apartment with a concierge and well set up for parents. Now we have a more permanent home, an unfurnished three-bedroom apartment in Park of Nations which we had free rein to decorate as we wanted.”
“We lost out on one apartment before securing our rental,” Sara continues. “Other friends who have since moved to this area have found it far more competitive. Increasingly, Lisbon is becoming a fast-moving real estate market so, just as in any city, you have to get your ducks in a row once you have found the place you want to rent.
“Lisbon has a lot of choice in its different areas and we chose Park of Nations for its contemporary, family-friendly feel. There’s so much to do right on the doorstep, along with a good choice of schools including United School of Lisbon where I plan to enrol my son.
“The area is less than ten minutes from the historical centre and 15 minutes from the airport. Lisbon is a famously hilly city but Park of Nations is relatively flat, great for the buggy and now good for bikes and scooters.”
Need to know
Strict rent control laws in Lisbon and a lengthy eviction process meant that for years, property across the city had been left to slowly crumble as landlords had no incentive to make improvements.
In 2011, those rent controls were scrapped, and the following year the Golden Visa* was introduced, allowing non-Portuguese passport holders who spent €500,000 or more on a property to qualify for a resident’s permit.
The result was swift: elegant historic properties in prime city centre locations were refurbished, and the Airbnb market flourished with a raft of on-trend properties as Lisbon was rediscovered by an eager generation of weekending budget-airline travellers.
(*NB: As of January 2022, property in Lisbon no longer qualifies under the Golden Visa scheme.)
In 2014, Lisbon introduced the requirement for an AL Licence (Alojamento local) for short-term rentals. In 2018, the rules were further tightened as the city restricted the issue of this licence in certain areas – generally the most popular tourist areas.
Carlotta Pelikan of Athena Advisers provided the following outline of Lisbon’s rental rules.
There are three main rental situations in Lisbon:
Short-term lets: Covers rentals from one night to one year. Property owners are required to apply for an AL Licence, which takes around one week to obtain and lasts for five years. However, since 2018, only 25 per cent of any single neighbourhood will be allocated this licence and that means large parts of the historic city centre have no allocation left.
The zones are reviewed every six months. At the time of writing, rental licences are not available in central areas including Alfama, Baixa, Bairro Alto and Avenue de Liberdade. Properties with AL Licences must be furnished.
Mid-term lets: Rentals for a minimum of six months. These can be permitted either with or without an AL Licence. If renting without an AL Licence, owners are taxed at 28 per cent on rental income, as for a long-term let. If renting with one, they are taxed at 8.75 to 16.8 per cent, the same as a short-term let, depending on whether they are Portuguese tax residents or not.
Long-term lets: Any period over one year. These do not require a rental licence.