Canary Islands introduce new rules for rental housing
The Canary Islands (Islas Canarias) have approved the region’s first-ever law establishing clear regulations for short-term tourist rentals. The regional parliament passed a document replacing the nearly decade-old decree, aiming to eliminate legal uncertainty for property owners, municipalities, and regional authorities.
Under the new law, owners currently operating under the old rules may continue their activity. However, the registration of new properties for short-term rental will be suspended for the next five years. During this period, local governments must develop and approve their own plans for allocating tourist apartments.
Municipalities granted greater authority
From now on, municipalities will decide where and to what extent short-term rentals are permitted. They are empowered to set limits by area and number of properties to maintain a balance between residents’ interests and the tourism industry. Authorities emphasize that these measures are necessary to protect the quality of life for locals.
The law also requires that at least 90% of the housing stock be dedicated to permanent residence, with no more than 10% allocated for tourism. Within six months, municipalities are required to carry out inspections and enforce compliance with the new rules.
Restrictions on new and social housing
Special attention has been given to protecting social housing: apartments classified as Viviendas de Protección Oficial (VPO) are completely excluded from the short-term rental market. Additionally, converting entire buildings into so-called ‘pseudo-hotels’—where all apartments are rented to tourists and owned by large landlords—is prohibited.
An extra restriction has been imposed for new residential buildings: they can only be rented out to tourists ten years after construction. This measure aims to prevent housing shortages for permanent residents and preserve the residential purpose of new properties.
Statistics and market response
According to statistics, the Canary Islands rank fourth in Spain for the number of apartments rented to tourists. As of May 2024, the region had more than 50,000 such properties. Over the past six months, their number has decreased slightly.
The provinces of Las Palmas and Santa Cruz de Tenerife are among the top five in terms of tourist apartments, surpassed only by Andalucía, Valencia, and Catalonia. More than half of these properties are managed by foreign companies or owners, and nearly 45% by private individuals.
Experts note that short-term rentals generate over two billion euros a year for the archipelago’s economy. However, the new law has sparked debate between representatives of the hotel industry and apartment owners. Hoteliers have supported the initiative, seeing it as a step toward regulating the market and making housing more accessible to local residents. At the same time, homeowner associations fear the restrictions could negatively impact the incomes of thousands of families.
Law Enactment and Next Steps
The law will take effect immediately after its publication in the region’s official bulletin. Authorities emphasize that a significant amount of work lies ahead to implement and enforce the new rules. The legislation is the result of lengthy discussions and compromises among various political forces, some of which opposed the changes.
