The new Holiday Rental Law moves closer to implementation

If you are the owner of a holiday rental property in the Canary Islands and have yet to file the required prior notification of classified activity, now is the time to act. The Canary Islands' Tourism Minister, Jéssica de León, has urged property owners to ensure compliance ahead of the anticipated approval and implementation of the new Holiday Rental Law.

Properties that have not filed the necessary communication will be excluded from the forthcoming regulations. This means if you have not told the authorities you are letting your property, you need to!

De León clarified that properties already authorised under Decree 113/2015 will not face significant challenges when the new law comes into effect.

“Owners will simply need to file a declaration of use. The administration will verify that all requirements are met and facilitate the change of use designation, transitioning the property from residential to tourism-focused use for lawful holiday rental operations,” she explained.

The minister assured owners that the adaptation process is straightforward for those already meeting the necessary criteria. “We still have several months ahead for property owners to complete this legal adjustment,” she emphasized.

She also highlighted the distinction between holiday rental properties and rural homes. Owners of holiday rental properties must submit a declaration of responsibility, while owners of rural homes are subject to a prior notification process.

Rural homes, often located on specially designated land such as agricultural or protected rural zones, must undergo a classified activity assessment. However, De León noted that the overall procedures for both property types are broadly similar.

Overview of the new Holiday Rental Law

The new Vacation Rental Law aims to regulate the growing sector of holiday rental properties. Under this law, property owners who have not submitted the required prior notification of classified activity will find their properties excluded from legal rentals once the legislation comes into force.

This process involves verification by the authorities to ensure compliance with the new requirements, allowing these properties to officially shift from residential to tourism use.

Key provisions of the new law include:

• Municipal Authority: Local councils are empowered to determine areas where holiday lets are permitted, ensuring that at least 90% of residential capacity remains for non-tourist use, unless urban planning justifies a lower percentage.
• Transitional Provisions: Current property owners operating holiday lets can continue indefinitely if they comply with existing regulations. However, this right is non-transferable and ceases if the property is sold or the activity is abandoned. Non-owner operators have a five-year period to comply, extendable by another five years, or up to 20 years if they convert an equivalent number of properties into long-term rentals.
• Technical Requirements: The minimum usable area for vacation rentals is reduced from 39 to 25 square metres, provided the property meets conditions like offering parking, having a pool, or contributing to job creation.
• Prohibition of "Pseudohotels": Newly constructed properties must serve residential purposes for at least ten years before being eligible for tourist use. Large blocks of rental properties operating like hotels are explicitly banned. Existing properties of this nature must comply with transitional provisions, convert into urban hotels, or switch to long-term residential rentals.

As the legislation edges closer to approval, the message is clear: property owners must act promptly to ensure their holiday rentals remain compliant and ready for this new regulatory framework.