Gran Canaria halts new short-term rentals

Five-year moratorium on tourist licences reshapes the property market and stalls holiday-let expansion

The government of the Canary Islands has introduced sweeping regulation banning new tourist-apartment licences in southern Gran Canaria for five years, drastically altering the local holiday-rental market and real-estate investment outlook.

Key takeaways

• Five-year moratorium on new tourist-apartment licences: Existing registrations remain valid, but no new short-term rental licences will be approved in major municipalities in southern Gran Canaria.
• Sharp divergence in asset valuation: Properties already licensed for holiday rentals may increase in value due to scarcity, while newly built or unlicensed units face a steep decline because they cannot legally operate under the tourist-rental model.
• Licence transfer restrictions create long-term uncertainty: The law may limit or ban the transfer of holiday-rental licences upon sale or inheritance, severely impacting the resale value of tourism-investment properties.
• Municipal control and planning decentralised: Local councils gain authority to decide location and density of tourist accommodations, introducing variable regulatory risk across municipalities.
• Capacity caps and conversion bans limit growth: The law caps tourist-use housing at 10 % of residential stock in affected areas and prohibits converting commercial premises or new buildings into holiday lets for their first 10 years.
• Broader agenda to protect housing supply and residents: The regulation is positioned as a move to relieve pressure on the local housing market and curb over-tourism, reflecting a shift away from growth-driven short-term rental expansion.

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