On 21 April 2022, the Supreme Court of Justice (Supremo Tribunal de Justiça) in Portugal blocked the possibility of permanent habitation and temporary (for touristic purposes) coexisting. In other words, it allowed condominiums to restrict or order the cancellation of existing short term rental licenses (Alojamento Local).
This ruling sends a shockwave through the Portuguese Real Estate Market, creating uncertainty in potential investors and people holding licenses in condominiums, most likely influencing the market price for these types of properties. However, this doesn't turn or make your AL in this situation illegal; it will just favour the condominium's decision in case of a dispute in court.
So what we can advise our potential property buyers in Portugal is to inquire beforehand if the specific condominium of the investment property allows for short-term rentals. And specify the search for a property without shared spaces needing condominiums, like standalone houses, townhouses, villas, or touristic properties.