Holiday letting law

Holiday Letting Law Redrafted

Updated April 2024

The Canarian government has presented a draft holiday letting law, which affects vacation rental homes on the islands, and which is expected to go through the parliamentary process over the next few months before becoming law.

Bear in mind, this is an initial draft, and there may be changes as the draft goes through the system. We’ll update here as they happen.

Why Is This Happening?

Currently, there is very little regulation of the private letting sector on the islands. It’s a sector that has grown dramatically over the last ten years – for example, in Playa Blanca, more than 20% of the housing stock is registered for holiday letting.

Clearly, there needs to be new rules, for a number of reasons:

  • To protect tourists
  • To ensure owners are paying relevant taxes
  • To ensure the market isn’t over saturated
  • To increase availability of long term lettings for island residents

Key Proposals For The Holiday Letting Law

The draft law proposes that the regulation and issuing of letting licences should pass to each municipality, rather than The Cabildo of each island.

No more than 10% of the housing stock of each municipality can be used for holiday letting.

There will be a five year period for the transition to municipal control, during which time there will be no new licences issued and no changes for existing licence holders.

The new letting licences, after the five year period, will be issued for five years at a time, and renewable subject to an inspection.

Regular inspections of holiday let properties will be carried out to ensure they are complying with the rules.  

So called “Sub Housing” – tents, shipping containers and wooden sheds will be outlawed and may not be used as holiday lets.

Properties that are part of a community will require a communal vote in order to allow holiday letting.

It’s proposed that there is a ten year waiting period for anyone wanting to change their property’s status from residential to tourist, once the new system is in place.

Fines of between 15,000 € and 150,000 € are being proposed for people letting properties without the necessary licence.

Minimum standards are being proposed, which owners will need to meet after the five year transition period – these currently include solar water heating, air conditioning with heating and access to a socket for electric car charging.

What does this mean for property owners?

At this stage, assuming you have a letting licence, or VV, already no action needs to be taken, as this is still a “proposal,” and many bodies and departments need to be consulted in order to reach a final version. Once the final provisions are announced and the law goes into force, you will have five years to meet the standards that are required.

If you are letting an unlicensed property, our advice would be to apply for a licence as soon as possible, as it looks unlikely you will be able to do so once this new legislation is passed.

We’ll update here on the holiday letting law as soon as there is news. Currently the draft is open to public consultation until 2nd May, and is expected to be passed into law before the end of the year.

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