Canary Islands seeks to limit foreign property purchases

Canary Islands President Fernando Clavijo has announced a plan to limit property purchases by foreigners when the homes are not used as primary residences. The initiative aims to address the housing emergency by targeting demand rather than solely focusing on increasing supply.

The strategy involves two main approaches. At the national level, the regional government seeks to modify the Law of Local Treasuries to impose fiscal penalties on non-EU investors who purchase property without residing in it or using it for long-term rentals. This would also empower municipalities to implement usage restrictions in stressed areas and increase property tax (IBI) for vacant homes to encourage their return to the residential market.

To address purchases by EU citizens, the regional government is working through European channels. The administration is preparing legal reports to justify these restrictions as exceptional measures for the islands, aiming to navigate the European Union's principles regarding the free movement of capital and persons.