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As of December 13, 2025, the real estate market in the Canary Islands is playing by new rules. The “Law on the Sustainable Management of Tourist Use of Housing” has officially come into force.

For many expats and foreign property owners, this new legislation has created a lot of uncertainty. It doesn’t just change the rules for getting new licenses; it also changes the conditions for those who are already renting out their properties.

1. The 10% Cap and the Freeze on New Licenses

The most talked-about change is the introduction of “sustainability indicators.” From now on, tourist rentals cannot exceed 10% of the total residential buildable area in any given municipality.

What does this mean? In areas popular with international residents (like Tenerife, Fuerteventura, and Gran Canaria), this quota is often already full. Consequently, the granting of new licenses in these hotspots is effectively frozen.

2. The End of Indefinite Licenses

Previously, once you obtained a Vacation Home (VV) license, it was yours indefinitely. The new law changes this completely. Now, authorizations are valid for 5 years only. Once that period is up, owners must renew the license and prove that the property still complies with all technical and urban planning regulations.

3. Licenses Are No Longer Transferable

This is a critical point if you plan to buy or sell a property. The tourist license is no longer attached to the house; it is attached to the owner.

What does this mean in practice? If you buy a house that currently has a valid license, that license becomes void the moment the sale is completed. The new owner cannot automatically continue renting it out; they must apply for a brand-new license from scratch. Given the new 10% cap, obtaining one could be extremely difficult.

4. What If I Already Have a License?

Owners who obtained their license before the law came into force have a certain advantage, but you shouldn’t get too comfortable. Your license isn’t cancelled immediately, but it enters a Transitional Period.

You have 5 years to bring your property up to code with the new technical requirements, which may include:

• Improving energy efficiency (e.g., Class A air conditioning, better insulation).

• Accessibility upgrades (for ground-floor properties).

• Compliance with parking regulations and EV charging points.

If the property isn’t adapted within this timeframe, you could lose the right to rent it out.

Why This Matters for Your Insurance

At PBF Insurance, we have been insuring foreign residents for over 10 years, and we know one rule is fundamental: legal compliance is the foundation of a successful insurance claim.

If the legal status of your home changes (for example, if your license is suspended because you didn’t meet the new standards), your current policy might stop protecting you properly. This is especially risky regarding Civil Liability (Third Party Liability) coverage.

Free Policy Review

Laws change, but your protection needs to stay solid.

Not sure if your current insurance stands up to the legal reality of 2026? Get in touch with us. We will review your policy for free and let you know if everything is in order.

For any information, please contact us