The political discussion in the Canary Islands focuses on obtaining permission from the European Union to limit property acquisition by non-residents. This debate, with profound political and legal implications, raises the need to precisely define who these restrictions are aimed at and what is intended to be limited.
During the last parliamentary session on April 27, two deputies from different political parties, one from the PSOE and another from the PP, highlighted the importance of correctly focusing the debate. Both agreed on the need to “zero in” on this complex issue, which faces the intricate European legal machinery.
“"Which non-residents are we referring to? Those who come from Venezuela and had not resided here in the Canary Islands before? Our children who have left, lived in various places in the country or the world, and want to return to buy a home?"
The need to clarify concepts is fundamental to avoid erroneous interpretations or support that distorts the initial objective. It was emphasized that the purpose is not to persecute foreigners based on their origin, but to limit home purchases that are not intended for habitual residence, but for speculation.
Article 63 of the Treaty on the Functioning of the European Union (TFEU) prohibits restrictions on capital movements, including those related to the acquisition of real estate by non-resident EU nationals. Brussels has indicated that any such limitation would only be viable if justified by “overriding reasons of general interest” and if it passes a proportionality test.
A counselor from the Government of the Canary Islands has argued that the region's proposal “will never be discriminatory.” The goal is to limit home purchases by non-residents when the purpose is not habitual use, but speculation, such as holiday rentals or tourist exploitation. This measure seeks to protect those who reside on the islands, regardless of their birthplace.
“"It is a protection for those of us who live here, no matter where we were born."
The current approach combines three strategies: establishing limits on second homes, controlling holiday rentals, and implementing fiscal measures. The aim is to differentiate between living and investing, between residence and profitability, and between rootedness and value extraction in a territory with limited resources.
The difficulty lies in demonstrating that the measure is necessary, proportionate, and non-discriminatory. It will be crucial to prove that home purchases by non-residents for non-habitual uses significantly contribute to residential displacement and that there are no less restrictive alternatives to achieve the same goal. The challenge is to construct a precise measure, defensible before Brussels, and fair to the inhabitants of the islands.
