Canary Islands Housing crisis: Navigating Foreign Ownership & New Regulations
The Canary Islands are facing a growing housing crisis, fueled by skyrocketing property prices and rents that are increasingly pricing out local residents. This situation has sparked protests and prompted the regional government to seek solutions, including restrictions on foreign property ownership. Here’s a comprehensive look at the current state of affairs, the proposed regulations, and what they mean for you.
The Core of the Problem
For years,the Canaries have been a magnet for both tourists and foreign property buyers.While tourism boosts the economy, the influx of investment has dramatically inflated housing costs. This leaves many Canarians struggling to find affordable homes,impacting families and the overall social fabric of the islands.
The core issue isn’t simply that foreigners are buying property, but the scale of it and the resulting impact on local access to housing.
Initial Attempts at EU Intervention – and Why They Failed
in April, the Canary Islands government formally requested the European Union to consider limits on foreign home ownership. This proposal was then brought before the Spanish Congress and Senate in May.
Unfortunately, the plan was rejected by the Partido Popular (PP) and Vox parties. These groups argued that such restrictions could violate EU principles of free movement of capital and non-discrimination.
Renewed Hope: Government Support & The State Housing Plan
Despite the initial setback, the situation has evolved. Spain’s Minister of Housing has now voiced support for the Canary Islands’ proposal. This backing signals a growing recognition of the urgency of the housing crisis and the need for intervention.
The Minister believes this support validates the proposal’s viability and necessity to protect the housing rights of Canarian residents. Furthermore, the Ministry of Public Works, Housing and Mobility has accepted “the vast majority” of proposals within the State Housing Plan.
What’s Being Proposed: A Two-Pronged Approach
While direct restrictions on foreign ownership remain challenging due to EU regulations, Spain is pursuing a two-pronged strategy:
* EU Request for Limits: The Canary Islands continue to advocate for EU-level restrictions on foreign property ownership. this is a long-term goal, facing potential legal hurdles.
* “Super Tax” on Non-EU Buyers: Prime Minister Pedro Sánchez proposed a 100% ‘supertax’ on property purchases by non-resident, non-EU citizens. A draft law was presented to Congress in May.
How the “Super Tax” Would Work
If approved, this new law would effectively double the cost of property for non-resident, non-EU buyers across Spain, including the Canary Islands. This aims to discourage investment from outside the EU and potentially free up properties for local buyers.
Potential Impacts & Criticisms
The proposed “super tax” is not without its critics. Concerns include:
* Market Disruption: Some fear it could stifle foreign investment and negatively impact the construction sector.
* Legal Challenges: The legality of the tax could be challenged under EU law.
* Limited Impact: Critics argue it won’t address the root causes of the housing crisis, such as limited housing supply.
What Dose This Mean for You?
* If you are a Canarian resident: These developments offer a glimmer of hope for improved housing affordability. Continued advocacy and government action are crucial.
* If you are a potential foreign buyer (non-EU): Be prepared for potentially higher costs if the “super tax” is implemented. it’s essential to factor this into your budget and seek legal advice.
* If you are a property owner: Monitor the situation closely. Changes in regulations could impact property values and rental income.
Looking Ahead
The Canary Islands housing crisis is a complex issue with no easy solutions. The current proposals represent a notable step towards addressing the problem, but their ultimate success remains to be seen. Continued dialog, collaboration between regional and national governments, and a commitment to protecting the rights of local residents will be essential to finding a lasting path forward.
Further Reading:
* [Spain’s Canaries ask EU to help them limit foreigners buying homes](https://www.thelocal.es/20250408/spains-canaries-to-ask-eu-to-limit-foreigners-
