The short-term holiday rental, the villa or apartment let to a stream of visitors rather than a long-term tenant, looks like the simplest way to own a piece of the Canary tourism economy. It is also the most regulated, the most politically contested, and the most frequently misunderstood, and an investor who treats it as a straightforward buy-to-let is heading for a problem. The Canaries regulate this activity closely, and the rules are tightening rather than loosening.
Since 13 December 2025 the activity has been governed by the Canary Ley 6/2025, de 10 de diciembre, de Ordenación Sostenible del Uso Turístico de Viviendas, which ties it to municipal planning and repeals the parts of the 2015 vacation home regulation, Decreto 113/2015, that conflict with it. The law was amended by Ley 7/2026, de 31 de julio, in force since 15 August 2026. What follows reads the law as amended, which the consolidated text on the BOE did not yet reflect when this was written.
It is a regulated activity, not a passive let
Letting a property to holidaymakers in the Canaries is governed by specific regional rules on tourist accommodation, the vivienda vacacional regime, which impose registration, standards and conditions, and which restrict where and how the activity can be carried on. This is not the same as renting to a long-term tenant, and it is not unregulated. An owner who lets informally, outside the regime, is exposed to penalties, and the enforcement environment has hardened as islands respond to housing pressure and resident concern.
Under the 2025 law, before the activity starts the owner, or the person or company the owner has entrusted with it, files a declaración responsable with the cabildo insular, which enters the activity in the Registro General Turístico of the Canary Islands (article 7). An ordinary declaration is accompanied by, among other documents, a technical report on the dwelling, a certificate from the owners’ association where the building is under horizontal property, and a cédula urbanística showing that planning expressly enables tourist use of that dwelling, a last requirement that transitional provision nine disapplies on El Hierro, La Gomera and La Palma for the two years following the law’s entry into force. The registration number that results must appear in every advertisement of the dwelling, on a platform or in any other medium (article 8.6).
A declaration is also not permanent. It enables the activity for five years, or ten on El Hierro, La Gomera and La Palma and in municipalities declared to face a demographic challenge. Continuing afterwards requires a new declaration, filed in the month before the period ends, with every requirement then in force met, the zone still expressly suitable under planning and not declared a stressed residential market, and a favourable certificate from the municipality. If no new declaration is filed, the dwelling is permanently deregistered (article 10).
Where it is restricted
The tension between tourism and local housing has made short-term letting a live political issue across the Canaries, and the trend is toward more restriction, not less: limits in certain zones, conditions on which properties qualify, and in places outright prohibition of the activity in residential buildings. The precise position varies by island and municipality and is changing, so the single most important step before buying for holiday letting is to confirm that the specific property, in its specific location, can lawfully be used that way. Investors have bought on an assumption here and found the assumption wrong.
The 2025 law turns this into a planning question. Residential zoning does not by itself permit any form of tourist accommodation, and article 3.3 admits the tourist use of a dwelling only where planning expressly allows it with detailed zoning. A municipality that enables it must, as a general rule, keep at least 90 per cent of the residential floor area or dwellings in the area concerned for exclusively residential use, 80 per cent on La Palma, La Gomera and El Hierro, and can set a lower reserve only through a planning instrument other than the complementary planning instruments of Ley 4/2017, provisional ordinances included, that proves through a carrying-capacity study that the lower reserve neither breaches the requirements of sustainable urban and territorial development nor affects citizens’ right of access to housing (article 4). The dwelling must generally be at least ten years old, five on those three islands and in demographic-challenge municipalities, although planning may reduce that age outside stressed markets, and a declaration of a stressed residential market automatically suspends new tourist lettings while it lasts (article 5.1). If a municipality has not adapted its planning within five years of the law’s entry into force, the cabildos process new declarations under subsidiary rules that the law itself sets (article 5.2 and transitional provision eight). The 2026 amendment added a separate occasional regime, capped at 15 days a year and tied to festivals of declared tourist interest or to activities of general interest, events or competitions of particular cultural, social or sporting relevance, which planning can enable without those reserve percentages and under which the dwelling keeps its residential use (articles 4.2, 7.8 and 9.3). On El Hierro, La Gomera and La Palma the law applies without prejudice to their own tourism planning law, Ley 14/2019, which prevails in case of conflict (articles 1.1 and 3.4).
Inside a building under horizontal property, regional and national rules work together. The 2025 law bars the activity where, among other cases, the title, the statutes or a resolution of the owners’ meeting rule out uses other than habitual residence (article 5.1). Since 3 April 2025 the national Horizontal Property Law has also required an owner who wants to start letting to tourists to obtain the express prior approval of the community (article 7.3), by a majority of three fifths of the owners representing three fifths of the participation quotas, the same majority that can limit, condition or prohibit the activity or set special charges or a higher share of common expenses for that dwelling, provided the increase does not exceed 20 per cent (article 17.12). Those resolutions have no retroactive effect, and an owner already letting under the regional rules before the reform may continue on the conditions and within the periods of those rules.
A holiday rental in the Canaries is a licensed tourism activity in a market that is restricting it, not a passive apartment that happens to be let by the week. The licence is the asset.
Buying a property that already lets
Vacation homes lawfully registered under the 2015 regulation were not closed overnight. An owner who is also the holder of the declaration may, within five years of the law’s entry into force, file a declaration of consolidated tourist use with the municipality; the original declaration then stays in force, the new planning is no obstacle, and the time limit of article 10 does not apply, although the cabildo checks the original declaration, and a negative report from it is binding and leads to both declarations being set aside (transitional provision one). The price is that the dwelling can then have no residential use at all, by the owner or anyone else, and the filing must state, among other things, that the same person operated it for tourists without interruption for more than a year before the law took effect, something the law says can be shown through the IGIC returns for the activity or any other valid evidence.
For a buyer the decisive text is paragraph 11 of that provision. The consolidated status lapses when the beneficiary ends the activity for good, and the causes listed include the transfer of ownership of the dwelling by any title, the extinction of the owner’s legal personality and more than a year without continuous operation. The 2026 amendment added an exception for inheritance: the new owner on death may notify the change of holder of the declaration and continue for no more than ten years from that transfer, a period later inheritances cannot extend. A buyer who wants to start letting in their own name files a declaration under article 7 and meets its requirements as described above. A price that assumes the consolidated status comes with the property assumes something the law says ends on the sale. Where a declaration was filed under the 2015 regulation but the prior communication of classified activities has not been filed with the municipality, the 2026 amendment allows it to be filed before 31 July 2027, failing which the activity must cease immediately (new transitional provision ten).
What happens when the rules are not met
The consequences start with the declaration itself. An inaccuracy, falsehood or omission in essential data, which the law defines as the identity of the operator or owner, the classified-activity documentation and requirements, the horizontal property position, and the capacity, cadastral reference or planning status of the dwelling, stops the activity from the moment it is detected, may oblige the declarant to restore the previous legal position, and can bar a new filing with the same object for up to three years (article 8.4). Continuing to let a dwelling to tourists after its enabling title has lapsed is a serious infringement under article 383.3 of the Canary Ley 4/2017 del Suelo y de los Espacios Naturales Protegidos, with a fine of between 15,000 and 150,000 euros. Advertising a tourist stay in a dwelling without the registration number is among the very serious infringements in article 75 of the Canary Tourism Law, Ley 7/1995, and article 79 sets fines of between 30,001 and 300,000 euros for very serious infringements.
The 2026 amendment also closed the obvious workaround. Unless proven otherwise, letting a residential dwelling for short stays is presumed to be tourist accommodation when it is marketed through a tourist channel, or when it is let for a continuous period of 31 days or less, once or more in a year (new article 11). For those short contracts the landlord must ask the tenant for the reason that justifies a temporary stay and how it connects with the agreed duration, and record them expressly in the contract, and a contract of 31 days or less in which they are not properly specified is treated as a tourist letting (new article 12). A short contract labelled as seasonal does not, on its own, take the dwelling outside the regime.
The tax treatment
Income from holiday letting is taxed, and the treatment depends on whether it is a mere letting or rises to an economic activity with services, on the owner’s residence, and on the structure. The Canary indirect tax applies to the activity in ways that differ from the mainland, and a non-resident owner faces the non-resident regime we describe in our note on non-resident borrowers in Spain. Getting the characterization right determines the deductions available and the compliance required, and it should be settled before, not after, the property is bought.
On the indirect side, the Canary rules exempt from IGIC the letting of buildings used exclusively as dwellings, but the exemption does not cover furnished apartments or dwellings where the landlord undertakes to provide any of the services complementary to the hotel trade, such as restaurant, cleaning, laundry or similar services (article 21 of the IGIC and AIEM consolidated text approved by Decreto Legislativo 1/2025). The same article adds that the exemption never applies to tourist accommodation in hotel and non-hotel establishments, nor to any temporary assignment of all or part of a furnished and equipped dwelling ready for immediate use that is marketed or promoted through tourist channels for profit or consideration. For a holiday let marketed or promoted through those channels, the exemption is therefore not available, whether or not services are provided. The IGIC record also matters for the licence, as one of the means the 2025 law names for proving the operating history that consolidation requires.
Structure it for what it is
Because holiday letting is a regulated tourism activity, the ownership and operating structure should reflect that rather than treating the property as a passive asset. Whether the activity is run personally or through a company, how it interacts with any wider Canary structure, and whether it can access the island incentives all depend on how it is set up. The wider Canary toolkit is in our note on the full Canary tax toolkit.
The 2025 law adds a licensing reason to get this right. Consolidation is available to the person who is at the same time owner and holder of the declaration, and the status lapses on a transfer of the property or on the extinction of the owner’s legal personality, subject to the inheritance exception described above (transitional provision one). Where a company that does not own the dwelling operates it under a declaration filed under the 2015 regulation, that declaration ends when its contract with the owner ends, even within the five-year transitional period the law gives existing operators (transitional provision two). Who holds title and who signs the declaration is therefore a decision with licensing consequences, not only tax ones.
Go in with eyes open
Holiday letting in the Canaries can be a genuine income asset in a year-round market, but only for an investor who treats it as the regulated activity it is: licence confirmed, structure right, tax settled, and the political direction understood. The investors who struggle are the ones who bought the apartment first and read the rules afterwards, in a market that is steadily making those rules stricter.
The regime is also still moving. The August 2026 amendment eased some points, such as the inheritance exception and the occasional regime for events, while adding the 31-day presumption and new tourism infringements, including one for short contracts that do not record the reason for the stay and its connection with the agreed duration.
Montclare structures and operates investments in the Canary Islands, from the ZEC and the RIC to hotel and real estate assets on the ground. Our services are set out on our services page.
This article is informational and does not constitute tax, legal or investment advice. The Canary Islands regimes have specific conditions and change over time; treatment depends on the facts. Each engagement is subject to scope and applicable regulation.