Court: Tribunal Supremo, Administrative Law Chamber

Judge: Diego Córdoba Castroverde (rapporteur)

Key question: Can an owner rent out their apartment as a holiday let if the complex is managed by a single tourism operator?

Origin: Campo Internacional de Maspalomas, San Bartolomé de Tirajana

Affected: Thousands of bungalow and apartment owners across all four major islands

What's at stake?

In late 2025, the Tribunal Supremo accepted a case that could fundamentally change holiday rentals in the Canary Islands. At its core is the "principio de unidad de explotación" — a principle from the 1995 Canarian Tourism Law requiring all units in a tourist complex to be managed by a single operator.

The case centres on a bungalow owner in Campo Internacional de Maspalomas who was ordered by the Gran Canaria Tourism Board to stop renting his property as a holiday let (vivienda vacacional) because the entire complex is registered as tourist apartments under one operator. The owner is fighting back, citing EU law.

The arguments

The owner's lawyers have invoked two powerful instruments: the EU Services Directive 123/2006/EC and Spain's Law on the Guarantee of Market Unity. Their argument is that forcing an owner to hand management to a single operator is a disproportionate restriction on the freedom to provide services — with no compelling public interest justification.

The other side — the Canarian Government and the TSJC (the islands' high court) — argues that the single-operator principle is essential for professionalising tourism and ensuring quality. The TSJC ruled in the lower instance that holiday lets and tourist apartments cannot coexist in the same building on land zoned for tourism.

Why this ruling matters

The Supreme Court explicitly accepted the case because it affects "a very large number of situations". The court specifically referenced thousands of owners of bungalows and apartments across Fuerteventura, Lanzarote, Gran Canaria and Tenerife who find themselves in the same position. The ruling will set binding precedent for all of Spain.

If the court strikes down the restriction, it could open the door to individual holiday rentals in thousands of complexes — against the wishes of management companies. If the restriction is upheld, the current model stays and owners remain bound to the operator.

Scenario A (owner wins): Individual holiday lets permitted in tourist complexes. Thousands of new listings could appear. Platforms like Airbnb and Booking benefit.

Scenario B (government wins): Single-operator rule stands. Owners must defer to the complex manager. The hotel and resort model remains protected.

The new law: Ley 6/2025

In parallel, the Canarian Parliament passed the Ley de Ordenación Sostenible del Uso Turístico de Viviendas (Gobierno de Canarias) in November 2025 — the most restrictive holiday rental law the islands have ever seen. Key provisions include a cap of 10 per cent of residential floor space per municipality that can be used for holiday lets (20 per cent on the smaller "green islands" of El Hierro, La Gomera and La Palma). Social housing (VPO) cannot be used as holiday rentals. New-build properties cannot be let for tourism purposes until ten years after construction. Licences are non-transferable — sell the property and the permit is lost. So-called "pseudo-hotels" — buildings where every unit is operated as a holiday let by a single large-scale landlord — are banned.

Tourism Minister Jéssica de León said the law gives the Canaries "for the first time, a proper legal framework for holiday rentals — after ten years of a decree with no clear rules." Critics warn of increased bureaucracy and financial losses for small-scale landlords.

15,500 properties without a licence

The scale of the issue is clear from one figure: more than 15,500 holiday rentals across the Canary Islands currently operate without a valid licence. Meanwhile, residential rents have been climbing for years — many Canarians can barely afford to live on their own islands. Current property prices in Gran Canaria have exceeded the historic mark of €1,963 per square metre.

The Canarian Government points out that 55 per cent of all holiday rental beds are operated by foreign owners or companies — not by small local landlords. The Supreme Court ruling will determine whether housing protection or property rights prevail.

What does this mean for expats and property owners?

Anyone who owns or is considering buying property in the Canary Islands should watch this case closely. It will clarify whether individual letting in tourist complexes becomes possible — or whether the single-operator model remains. For tourists, it matters too: more individual holiday lets mean more choice and potentially lower prices — but possibly less quality control.

For current information on the property market and cost of living, see our Relocate series, current fuel prices and the Gran Canaria weather.