The Canary Executive (CC-PP) has submitted to the Government of Spain a draft royal decree-law for the prohibition of purchasing a home in the islands for any person, whether Spanish or foreign, who does not prove ten years of residency registration in its territory (or 15, if discontinuous).
This legislative proposal, which Efe has accessed, also establishes that a single citizen may only purchase two homes in the Canary Islands - and always in different municipalities, while stipulating that legal entities (companies or investment funds) may only acquire homes in the islands if their corporate purpose is to sell or rent them to individuals.
Fernando Clavijo's Executive has sent this draft 'Law to guarantee access to housing for residents in the Canary Islands' as part of the conditions that Coalición Canaria agreed with the PSOE in exchange for their support for the first of the 'Maricarmen' decrees, the one that has limited evictions of vulnerable people.
Throughout this legislature, Clavijo has been making efforts with the European Commission to try to get authorization for the Canary Islands to set some kind of limit on home purchases, since statistics show that one-third of those that change owners end up in the hands of foreign citizens and a large part of them end up in the holiday rental business.
However, his initial approach clashed with community treaties, which guarantee the free movement of people and capital in the EU and prohibit distinctions based on nationality.
This legislative proposal attempts to overcome this obstacle in two ways: it is not based on nationality, but on an objective fact such as residency, proven by registration, and invokes Article 349 of the Treaty on the Functioning of the European Union, which guarantees ultra-peripheral regions the right to special treatment in the application of community rules.
The explanatory statement explains it thus: "The guarantee of access regime established by this norm is the most appropriate way to achieve the pursued objectives, without incurring discrimination based on nationality, since anyone residing in the islands may benefit from this mechanism, and may, in the meantime, live in them under a rental agreement or any other form of temporary housing occupation."
"In turn, the limitation to a maximum of two homes aims to prevent the condition of resident from becoming an unjustified advantage with respect to the objective of guaranteeing that these people can access decent and adequate housing; once that figure is exceeded, the guarantee becomes inapplicable," he adds.
Gentrification and tourist rentals
Why is the Canary Islands Government proposing these measures? The Clavijo Executive recalls that the Canary Islands, due to their insular condition, have territory of "limited surface area" and with "fragility of its biodiversity," both circumstances that "determine a limited use of insular space," which impacts access to housing.
And at the same time, it warns, it suffers from "the phenomenon of gentrification that is produced by the acquisition of homes for purposes other than use as a habitual residence by individuals and companies domiciled elsewhere, with the displacement of people who do reside on the islands and making it very burdensome or even preventing them from buying the homes they need."
"This reality makes it necessary to adopt measures that guarantee residents' access to existing homes and those that will be built," argues the explanatory statement.
The text proposed to limit purchases by non-residents is categorical and even includes reinforced guarantees. If it goes ahead, any purchase of a home in the Canary Islands by someone who does not prove the required period of residence "will be null and void" and cannot be registered in the Property Registry.
The same is established for companies: any home purchase made by a legal entity will be null and void if its corporate purpose is not to sell or rent it to individuals.
However, transfers 'mortis causa'; that is, inheritances, are exempt from these limitations and prohibitions.
Weapons for town councils
The Canary Islands Executive proposes a second legal reform to the Council of Ministers, this time of the Law on the Bases of Local Regime, to give town councils the tools to intervene in the problem of housing scarcity in their territory.
Firstly, it proposes that town councils can buy or rent homes in their territory from citizens of countries outside the EU who have not resided for a minimum of two years in their municipality (a category that includes, for example, citizens of the United Kingdom, the main emitter of tourists to the Canary Islands).
It also proposes that town councils be enabled to create tourism taxes, which would tax "overnight stays, lodging, or stays in tourist accommodations for non-residents".
Finally, it suggests that town councils be authorized to prohibit vacation rentals in certain areas of their municipality.
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