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Date Published: 11/02/2025

The new way that the Canary Islands want to limit tourist rental properties

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One of the motions in the bill, which has yet to be approved, is to ban new build properties from being used for tourist rentals until 10 years after their construction

The new way that the Canary Islands want to limit tourist rental properties

The Canary Islands Government has officially launched the legislative process for its Sustainable Regulation of Tourist Housing Law, aiming to curb property speculation and prevent the rise of so-called “fake hotels” in the Spanish islands.

The bill, which was presented on Thursday February 6, is set to undergo parliamentary debate before a final vote. The proposed legislation aims to restore balance in the housing market by implementing strict controls on the expansion of holiday rentals.

The tourist sector in Spain has made the Spanish economy one of the strongest in Europe, and under no circumstances does the country want to lose income earned from tourism, but the rapid growth of the sector has caused challenges for those living in tourist-heavy areas.

If and when it is enacted, the new Canary Islands law will ban newly built properties from being used for tourist rentals for 10 years after construction and prohibit entire residential buildings from being converted into holiday lets.

You may also be interested in: Tourist rental apartments and holiday lets in Andalucía—Changes coming to apartment buildings in April 2025

These measures are expected to halt property speculation, where real estate prices are set based on potential short-term rental income, and effectively end the practice of turning residential buildings into pseudo-hotels by issuance of VV licences.

Article 5, Section 1 of the new law establishes rules for properties classified as residential, stating that residential properties intended for tourist stays must be at least ten years old, as verified through a declaration of new construction, a first occupancy licence, a municipal certificate, a cadastral certification or any other legally valid documentation.

The government argues that this rule is designed to prevent developers from designing and selling properties explicitly for tourist rental use from the outset, which has driven up property prices and distorted the housing market.

In recent years, many developers have marketed entire projects to investors looking for the high returns offered by short-term rentals, further inflating property prices and reducing the availability of homes for local residents.

Article 5, Section 2 also sets strict limits on tourist rentals within residential complexes and buildings. Specifically, it states that no more than 10 tourist rental beds will be allowed in a single residential building, that there must be a 1:10 ratio between tourist and residential units, and there will be restrictions on the total square metres allocated to holiday lets.

These new rules introduce a double barrier to the spread of unregulated tourist accommodations disguised as residential buildings. The restrictions will apply both to newly built properties and older buildings that have already surpassed the ten-year requirement.

The Canary Islands Parliament will now debate potential amendments before voting on the final version of the law. The government is pushing for its implementation by the end of 2025, arguing that the surge in holiday rentals has disrupted the property market, reduced the availability of long-term rentals for locals and contributed to rising living costs.

What it will not mean is that the Canary Islands are looking to ban tourists from visiting on holiday.

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