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Canary Islands seeks power to curb foreign home purchases
The President of the Canary Islands, Fernando Clavijo, wants housing to be one of the issues “on track” before the end of the parliamentary term, and has placed among his main goals securing the power for the islands to limit the purchase of homes by foreigners when the properties are not intended as a habitual residence.
The president believes that increasing housing supply alone is not enough: action is also needed on demand which, in certain cases, is linked to buyers with greater economic capacity who acquire properties they then do not use as a residence.
Two fronts: Madrid and Brussels
On the purchase of homes by foreigners, the Canary Islands is working on two different fronts: the national and the European. With the Spanish government, Clavijo is proposing changes to the Law on Local Finances and Local Government. In the case of non-EU buyers, the proposal would allow those who acquire a home in the Canary Islands and neither live in it nor rent it out as a habitual residence to be penalised through tax.
This reform would also have a municipal dimension. Clavijo proposes giving town councils the tools to act in areas they consider to be under housing pressure, including the possibility of imposing restrictions on the use of certain homes and increasing Council Tax on those that remain empty. The aim, in this case, is to encourage those properties back into the residential market.
The European route is the one needed to make progress on limiting purchases by EU citizens and, more broadly, to be able to establish restrictions on both EU and non-EU buyers. In the specific case of limiting access to property purchases for non-resident EU citizens, the Canary Islands’ objective is that a home must be used by its owner to live in or be offered as a long-term rental, rather than being left purely for speculation or holiday letting.
Legal studies and a November meeting in Brussels
Clavijo maintains that the Canary Islands already has “advanced” legal studies to back these initiatives and that the regional government is working on the necessary documentation. His aim is to use the final stretch of the parliamentary term to get this route on track. “We would like to close the European route so we can limit the purchase of homes by foreigners,” he said when listing the issues he considers priorities before the next elections in May.
As part of that work, the president hopes to meet Raffaele Fitto, Executive Vice-President of the European Commission for Cohesion and Reforms, in November, and wants to keep raising the issue with him. Clavijo explains that the regional government is currently “working and drawing up the documents” required and accepts that the European process will be “slower”, but insists that progress must be made on this route during the remainder of the term.
Brussels unveils its Affordable Housing Law
The Canary Islands’ position now finds a new scenario in Brussels. On Wednesday, the European Commission presented its proposal for an Affordable Housing Law, intended to give greater legal certainty to states, regions and municipalities that adopt measures to protect the availability of housing in areas under the greatest pressure. The proposal was presented by the European Commission’s Executive Vice-President, Teresa Ribera, and the Commissioner for Energy and Housing, Dan Jørgensen.
Ribera argued that, for the first time, Brussels is establishing a “legal umbrella” so that authorities can take measures against the housing crisis. The new regulation also contemplates the possibility of limiting the acquisition of properties that are not intended as a primary residence, including second homes, in areas that can demonstrate a situation of housing pressure. Restrictions must be justified, necessary, proportionate and non-discriminatory.
The Commission itself acknowledges that several member states have already adopted measures on second homes or other non-residential uses, and that these actions have run into legal problems over their compatibility with EU law. The new proposal is precisely intended to provide greater clarity and legal certainty to authorities that decide to intervene in markets under strong pressure.
Housing department welcomes “important step forward”
The Housing Department, led by Pablo Rodríguez, regards Brussels’ approach as an “important step forward”, since allowing restrictions on second homes could produce a result similar to the one the regional government is pursuing. According to the minister, the islands must prioritise access to housing for those who live there, and he has argued that the entire archipelago has been under housing pressure since the housing emergency was declared on 19 February 2024 through the approval of Decree-Law 1/2024 on urgent housing measures, although he acknowledges that the intensity of the problem varies between municipalities.
The Housing Department stresses, in any case, that the European approach is still awaiting detail and that future restrictions will have to be justified with data and comply with the requirements finally set out in EU legislation.
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