A Landmark Decision for Island Living
After more than two years of debate, the Parliament of the Canary Islands has approved a highly controversial vacation rental law. The decision, passed this Wednesday, saw support from the parties backing the regional government—Canarian Coalition, Popular Party, ASG, and AHI—while the opposition, comprising PSOE, New Canaries, and Vox, voted against it. This is one of the most contentious regulations of the current legislative term, facing significant opposition from various social groups across the archipelago.
Widespread Discontent and a Singular Supporter
The new law has managed to displease almost everyone involved. The tourism rental industry association is unhappy, it has put local councils on a war footing as they will bear the primary burden of enforcement, and it even caused a schism within the Canary Islands Economic and Social Council. The only entity that has consistently supported the text is the hotel industry association, the main competitor for tourist accommodation.
The Core of the Law: A 10% Cap on Vacation Homes
The legislation has undergone several changes since its initial draft in April 2024, with most modifications further relaxing requirements for the sector. However, its flagship measure remains unchanged: a cap limiting tourist housing to 10% of the total housing stock in each municipality or neighborhood. With just over one million homes in the Canaries, this means a maximum of 100,000 can be used for tourist purposes.
Exceptions for the Green Islands and Struggling Towns
This 10% threshold is not absolute. On the so-called “Green Islands”—La Palma, La Gomera, and El Hierro—the permitted percentage can be as high as 20%. The same higher limit applies to municipalities designated by the regional government as facing “demographic challenges,” based on criteria such as depopulation, an aging populace, and economic slowdown.
A Five-Year Deadline for Local Councils
Local councils now have five years to approve urban planning instruments that reserve these percentages for tourist housing in their localities. These plans must specify where and how tourist apartments can be established. If a municipality wishes to raise the cap, it must justify the decision with carrying capacity studies. Until such regulations are in place, no new licenses can be granted for five years, after which subsidiary rules will take effect as a last resort.
License Duration and the Grandfathering Clause
New vacation rental licenses will be valid for five years, or ten years in the Green Islands and in municipalities with demographic challenges. All vacation homes currently listed in the Canary Islands Government’s General Tourism Registry—over 70,000 properties—will also be subject to this five-year transitional period. This is designed as a compensatory regime, giving existing operators time to adapt to the new legal requirements. If operators can “credibly prove” that five years is insufficient to “compensate” for the loss of their license, they can request a single five-year extension. This means that issues of gentrification and tourist saturation, which the law itself acknowledges by referencing “obsolete and unsustainable urban models,” could persist for up to a decade.
Key Restrictions and Requirements
The law introduces several important restrictions. It prohibits tourist use in homes that are or have been subject to public protection schemes (VPO). To verify this, the island councils can collaborate with the Property Registrars’ Association. Furthermore, licenses will be denied if the homeowners’ association votes against the activity, if the property is in an area declared as having a strained residential market (as recently requested by Las Palmas de Gran Canaria), or if the property is less than ten years old. Again, on the Green Islands and in challenged municipalities, this minimum age requirement is reduced to five years.
A Lifeline for Small Owner-Operators
A highly relevant provision allows individuals who are both owners and operators of tourist apartments—so-called “small owners”—to apply for “consolidated tourist use of the property.” This special permit authorizes them to rent out their home indefinitely, without time limits. Interested parties have a maximum of five years to apply and must prove, through activity declarations and tax filings, that the property was used for tourism in the year immediately preceding the law’s enactment.
The Application Process and Property Standards
The application method remains the “declaración responsable” (responsible declaration). An operator submits the declaration, and the Administration subsequently verifies if all technical requirements are met. Key requirements include a minimum home surface area of 35 square meters (though 25 square meters is acceptable if compensated with amenities like a swimming pool or parking space), a minimum energy efficiency class of F or D (a relaxation from the stricter class C or B in the original draft), and a solar hot water system “where technically and legally possible.”
Enforcement Challenges for Local Councils
Local councils are tasked with verifying that vacation rentals comply with the bulk of the regulations. As a classified activity, the sector must adhere to sectoral rules on safety, health, and accessibility. However, this is a Herculean task for most local entities, which lack the human resources. The law mandates they approve an inspection plan within eight months, with its execution not to exceed four years.
A Path to Convert Entire Buildings
Finally, a significant transitional provision opens the door for owners of entire residential buildings dedicated to vacation rentals to request a change in planning for exclusive tourist use. In other words, it allows for the conversion of entire blocks of tourist apartments into hotels or aparthotels, which would then “cease to be counted as housing and for residential use.”
