Balearic Islands resist restrictions on foreign homebuyers

The regional government of the Balearic Islands has firmly opposed recent calls from the Canary Islands for European Union intervention to limit foreign purchases of homes. This stance comes despite shared challenges of mass tourism and a strained property market faced by both archipelagos.

Authorities in the Balearics have rejected proposed restrictions aimed at curbing the rise in rents and property prices. This response follows the Canary Islands' formal request for EU assistance to impose limits on foreign homebuyers within the Spanish archipelago.

Additionally, Spain's Prime Minister, Pedro Sánchez, has suggested imposing a 100 percent tax on non-EU non-resident buyers or even prohibiting them from acquiring property unless they have significant ties to Spain. Another proposal would require temporary residents to obtain permission to buy homes, a measure that has already been dismissed by Congress.

Data from Spain’s National Statistics Institute (INE) reveals a staggering 30 percent increase in property prices in the Balearics over the past five years, with rents surging by 40 percent. In response to these alarming statistics, Francisca Ramis, the Director of Institutional Relations and Parliamentary Affairs for the Balearics, expressed her opposition to restricting foreign home purchases, citing violations of free market principles, fundamental rights, and EU regulations.

The proposal for restrictions was initially floated by the Canary Islands government during the recent General Assembly of the Islands Commission of the Conference of Peripheral Maritime Regions of Europe, convened in La Palma. Ramis emphasized that such measures would not address the housing crisis in her region, which has also been grappling with the repercussions of mass tourism. Instead, she highlighted various local initiatives, including a tourist tax and limitations on rental vehicles and cruise ships, aimed at managing tourism's impact.

“We must remember that we are Europeans and cannot contravene the regulations established by the European Union,” Ramis remarked, acknowledging the housing shortage and the effects of mass tourism but asserting the need for coexistence with these challenges.

To alleviate the housing crisis, recent reforms have been enacted to streamline administrative processes for construction, including converting ground floor premises into residential units.

The Canary government’s recent announcement marks the first formal request to Brussels for measures limiting foreign property purchases. This issue has been on the table since at least 2022, when the nationalist political party Nueva Canarias urged the regional government to address the influx of non-resident property buyers. However, this is the first instance of the Canaries’ regional government, led by the local party Coalición Canaria, escalating the matter to the EU level.