canary islands non resident property restrictions

Canary Islands housing: politicians probe non-resident limits

Defining the target: who counts as a non-resident?

The political debate over securing permission from the European Union (EU) for the Canary Islands to restrict property purchases by non-residents – not to mention the legal and political complexities behind it – raises a question that political parties have yet to answer: who exactly are we talking about, and what are we planning to limit?

Two deputies from opposite ends of the political spectrum – Patricia Hernández (Spanish Socialist Workers’ Party, PSOE) and Jennifer Curbelo (People’s Party, PP) – hit the nail on the head during the most recent parliamentary session on 27 April. The socialist and the conservative agreed on the need to “zero in on the target” in a multifaceted debate that must navigate a complex European legal framework.

“Which non-residents are we referring to?” Curbelo asked. “Those coming from Venezuela who hadn’t lived here in the Canary Islands before? Our own children who have left, lived in various parts of Spain or the world, and want to come back to buy a home?” Hernández agreed with the PP deputy on the need to “define the concepts and know what we are talking about”, warning that when words get too muddled, they can open the door to unwanted support or approaches that have nothing to do with the original objective. “Suddenly, we could end up with Vox’s support because we are mixing the concepts so much that they become blurred,” she pointed out.

Foreigner vs non-resident: a crucial distinction

The former mayor of Santa Cruz de Tenerife refined the difference: the issue is not about targeting foreigners for being foreign – as Vox argues with its concept of “national priority” – but about limiting purchases of homes that are not intended for living in. “Does it bother us that Italian supermarket workers buy a house? That would be discrimination on the grounds of nationality,” she argued. Both Hernández and Curbelo reminded the chamber that in the Canary Islands, a person can be a foreigner, work here for years, be considered Canarian under the Statute of Autonomy, and even become a deputy. For this reason, both insisted that “being a foreigner is one thing; being a non-resident is another”.

The EU legal barrier and the proportionality test

Article 63 of the Treaty on the Functioning of the European Union (TFEU) – effectively Europe’s constitution – generally prohibits restrictions on the movement of capital, including those related to the purchase of property by non-resident EU nationals. Brussels has already warned that any such restriction could only proceed if justified by “overriding reasons in the public interest” and if it passes the proportionality test.

It was here that Curbelo sounded a note of caution: asking the EU for “such an extraordinary measure” when the Canary Islands barely has a public housing stock of 1% means, at the very least, questioning whether they are putting the cart before the horse. The PP deputy did not deny the problem, but rejected prohibition as an automatic response. “We do not believe in a policy of punishment or prohibition,” she summarised.

From nationality to use: a shift in focus

This precision is no trifling matter. If the debate is framed as a restriction on foreigners, it slides towards discrimination on grounds of nationality, which is difficult to reconcile with European law. If, however, it is oriented towards purchases of homes by non-residents when the property is not intended for use as a primary residence, the conversation shifts: it no longer looks at the passport, but at the use of the property.

This is the line defended by regional councillor Pablo Rodríguez. The Canary Islands’ proposal, he assured, “will never be discriminatory”, because it does not aim to target anyone by their origin, but rather to limit the purchase of housing by non-residents when it is not for habitual use and is used for speculative purposes, such as holiday rentals or tourist exploitation. “It is protection for those of us who live here, wherever we were born,” he maintained.

Three fronts: second homes, holiday lets, and tax measures

The approach gaining ground combines three fronts: limits on second homes, control of holiday rentals, and tax measures. It would therefore be about distinguishing between living and investing; between residence and profitability; between putting down roots and extracting value from a limited, fragmented territory with scarce land.

David Toledo, from the Canarian Coalition (CC), was the one who forced this latest debate in parliament and encapsulated it in a blunt phrase: “The guarantee that living in the Canary Islands remains possible for Canarians, nothing more, nothing less. If you don’t understand that, you don’t understand anything.” Although, unlike the councillor, he did not specify who qualifies as “Canarian” in that equation.

The core question: a surgical measure, not a blanket ban

The nationalist’s argument connects with a concern that has been widespread in nationalist circles in the archipelago since the year 2000: that the islands end up being a profitable place to buy, visit, or exploit, but an increasingly difficult one to live in. The Canary Islands is appealing to its status as an outermost region, demographic pressure, territorial fragility, and the impact of touristification. The regional executive has taken its strategy to EU forums linked to island territories, arguing that the islands’ unique characteristics justify specific measures.

The difficulty, however, lies in proving that the measure is necessary, proportionate, and non-discriminatory. It will not be enough to say that housing is expensive. It will be necessary to prove that non-resident purchases of homes for non-habitual use contribute significantly to residential displacement, and that no less restrictive alternatives exist to achieve the same objective. The final question, then, is not whether the Canary Islands can ban for the sake of banning. The question is whether it can construct a surgical measure, defensible before Brussels and fair for those who inhabit the islands. A measure that does not punish those who come to work, those who return, or those who put down roots, but does set limits on turning housing into a simple seasonal asset. “It won’t be simple, it won’t be easy, but it is possible,” concluded councillor Rodríguez.

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