A sweeping new law in the Canary Islands freezes new holiday rentals for years and hands town halls the power to decide exactly where — and how many — can operate.
What the new law does
The Ley de Ordenación Sostenible del Uso Turístico de Viviendas replaces the 2015 decree that had been limping along for a decade. In the words of the regional Tourism Minister, the old framework “lacked clear rules for owners, councils, and the government”. This new law is pitched as the answer — a system designed to “balance” private activity with the “general interest”. We shall see.
The headline change: no new holiday rentals can be created for at least five years until each municipality approves a specific zoning plan. Only existing, compliant small owners can continue as they are.
Town halls get the upper hand
This reform effectively shifts the entire regulatory burden down to the ayuntamientos. Each council must decide:
- Where holiday rentals are allowed
- How many can exist
- Under what conditions they operate
Councils will be expected to defend residential quality of life, and they have six months to set up inspection plans. The overall limit is stark: 90% of homes must remain purely residential; only 10% can be tourist use.
What is expressly banned
Several red lines are written directly into the law:
- No VPO (social housing) can ever be used for tourism
- No “pseudohotels” — entire buildings of holiday rentals owned by a single large landlord
- Newly built homes cannot be used as holiday rentals for the first 10 years
These last two rules target institutional investors and large operators, and will sharply restrict future supply.
A sector too big to ignore
The Canary Islands are Spain’s fourth-largest holiday-let market, with 50,686 units recorded in May — behind Andalucía, the Valencian Community, and Catalonia. The islands are also home to two of the five provinces with the most tourist flats: Las Palmas and Santa Cruz de Tenerife.
It’s a fragmented but international market:
- 44.6% of units belong to private individuals
- 55.3% are managed by entities or foreign owners, who also control 55% of tourist beds
- The sector generates more than €2 billion a year, according to Ascav
Politics and backlash
The law took 18 months to materialise and passed with support from Coalición Canaria, the Partido Popular, ASG, and AHI. PSOE, Vox, and Nueva Canarias voted against it.
Predictably, reactions have split along well-trodden sector lines:
- The hotel lobby (Ashotel) applauds the “clarity and order” it brings to an activity they say disrupts access to housing.
- Holiday-let associations (Ascav) argue it will drive thousands of local families out of the tourist economy.
Implementation will likely be slow and uneven — and the real battle now moves to the town halls, where zoning decisions will make or break thousands of existing and future operators.
