Landmark Legal Challenge for Canary Islands Tourism
Spain’s Supreme Court has accepted an appeal that could fundamentally reshape the regulation of holiday rentals across the Canary Islands. The case was brought by the owner of a bungalow in Maspalomas, located in the municipality of San Bartolomé de Tirajana on Gran Canaria.
The Heart of the Dispute
The conflict began when the Gran Canaria Island Council (Cabildo) denied the owner permission to rent his property as a holiday home. His bungalow is part of the Tisalaya Park complex, which is registered as an extra-hotel tourist establishment operating under a single tourism operator. This structure follows the “touristic exploitation unit” principle established by the Canary Islands Tourism Law.
The Supreme Court’s decision to hear the case, issued on October 15th, comes after the Canary Islands High Court of Justice rejected the owner’s appeal in March 2025. The initial refusal was based on the complex being “outside the market” at the time of his application, as it lacked an active tourism operator.
Widespread Implications for the Archipelago
The high court considers the matter one of “objective cassational interest,” recognizing that the outcome could affect a large number of property owners in similar situations across the Islands. The ruling would directly impact numerous apartment and bungalow complexes not just in Gran Canaria, but also in Tenerife, Lanzarote, and Fuerteventura.
At the core of the legal debate is whether the touristic exploitation unit principle, outlined in Canary Islands Tourism Law 7/1995, imposes an unjustified restriction on the free provision of services. The court will determine if this regulation is supported by legitimate reasons of general interest related to maintaining quality and order within the tourism sector, or if it represents an undue limitation and abuse of property owners’ rights to commercially utilize their real estate.
A Broader Legal Framework
The case also involves the interpretation of several other key regulations: Spain’s Market Unity Guarantee Law 20/2013, Law 17/2009 on free access to service activities within the domestic market, and the European Parliament’s Directive 123/2006/CE.
A “Historic Triumph” for Property Owners
The Platform for Those Affected by the Tourism Law (PALT), which has supported several owners in similar legal processes, has celebrated the Supreme Court’s move as a “historic triumph.” This comes after 30 years of the tourism law being in effect.
“Finally, the exploitation unit principle is being questioned,” stated representatives from the organization. “For years, it has been used to limit the rights of legitimate property owners and deny business freedom within tourist complexes.” The platform believes that the extra-hotel tourism model based on mandatory unified management “has its days numbered.”
A Precedent-Setting Decision Ahead
In the coming months, the Supreme Court will rule on whether the mandatory joint management of tourist complexes is a justified measure defending the public interest, or a restriction that violates business freedom and property rights. The resolution is expected to set a legal precedent, with direct consequences for the future of holiday rentals in the Canary Islands and for the relationships between property owners and tourism operators in the archipelago’s most popular tourist areas.
