Can vulture funds be prohibited from buying homes in the Islands?

PalmaMÉS per Mallorca has revived an initiative that the PP and Vox struck down in Parliament in 2024, because it considers that the affordable housing proposal recently made by the European Commission gives it new relevance. It is a bill against housing speculation—which, if approved, will have to be submitted to Congress—whose star measure is the restriction on the purchase of properties by companies and legal entities, such as investment funds, commercial companies, and businesses. The ultimate goal of the regulation, which they will re-register with some modifications in the coming weeks, is for the housing market to prioritize its social function over financial return. The leader of the eco-sovereigntists, Lluís Apesteguia, argues that this proposal can have a legal basis, but the President of the Government, Marga Prohens, accused him of promoting the "expropriation" of homes. Is it possible to prohibit vulture funds from acquiring housing in the Islands?

The bill from MÉS per Mallorca proposes an explicit veto on the purchase of homes by companies and societies. Excluded from this are administrations for the development of public housing policies and the establishment of mortgage guarantees. It also requires accreditation, through municipal registration, of habitual residence in the Islands for a minimum of three consecutive years in order to acquire the ownership of a residential property. It also prohibits residents or their spouses who are already holders of one or more homes in the Spanish state or their country of origin from buying new properties. In parallel, it proposes that the buyer of a house acquires the sworn commitment to maintain their habitual residence in the property for at least ten years and, in case of a forced relocation due to force majeure, to put it up for rent at a capped price within 24 months, in favor of a resident: it would be prohibited for them to allocate the property to tourist rentals or change its residential use during that decade.

In parallel, it provides tools for city councils to approve, depending on the situation of the municipality, which of these measures to apply or not, provided that three conditions of a housing stress index also provided by the regulation are met. In the same vein, it proposes a sanctioning regime: notaries and registrars would have to notify all operations with non-residents in a specific government registry. Very serious infringements – such as buying or registering a property by bypassing the law – are punished with fines of up to 25% of the purchase value, with a minimum of 30,000 euros. Disqualifications of up to six months for registrars are also foreseen.

Sources from MÉS per Mallorca state that in the coming weeks they will update the law to add two proposals. The first, a bill presented last week by the Nova Canàries party that proposes turning housing into a subjective right enforceable through the courts against the Administration. Furthermore, it sets the goal of achieving 44,000 social housing units within a period of five years, and establishes stable public funding equivalent to 0.4% of the regional GDP, which in the Canary Islands would be about 256 million euros per year. To do this, it proposes introducing a specific tax on large holders, banks, and vulture funds that keep properties empty for speculative purposes to force their temporary transfer and the mobilization of the unoccupied stock, in addition to a package of tax cuts to facilitate access to primary residences. Furthermore, they will incorporate the proposal from a study by the Barcelona Metropolitan Strategic Plan (PEMB), that in strained areas only homes for the buyer's habitual and permanent use may be acquired, with exceptions such as the acquisition of entire buildings, provided that the homes are intended for regular rental, not for temporary or tourist uses. Regarding second homes, the measure would allow the purchase of a second home in a municipality different from the usual one, even if it is in a strained area, provided it is for personal use and not for rental or investment.

What legal fit do these proposals have?

The same sources argue that their proposal has a legal basis: "This is confirmed by the PEMB study and the proposal from the European Commission". In the explanatory memorandum of the bill, MÉS provides a legal argument. It invokes Article 47 of the Spanish Constitution, which establishes that all Spaniards have the right to enjoy decent and adequate housing. It also cites the Statute of Autonomy, and especially Article 33.4, which grants the community exclusive competence in housing. On the other hand, it recalls that the European Union already recognizes exceptions to limit the sale and purchase to non-residents in territories such as Malta, Denmark, and the Åland Islands in Finland. Furthermore, it argues that uncontrolled free investment in a limited territory generates a price increase that prevents the exercise of European freedoms such as the free movement and residence of persons and the freedom of establishment. On the other hand, it relies on the jurisprudence of the Court of Justice of the EU, which allows a member state to establish restrictions for overriding reasons of general interest. In the same vein, it emphasizes that the restrictions are based exclusively on the criterion of effective residence or registration and not on nationality, and that they are configured as extraordinary and temporary for municipalities in a situation of housing emergency.

Added to this debate is the study published in October 2025 by the PEMB study—a private association promoted by the Barcelona City Council and the Barcelona Metropolitan Area—which analyzed the legal feasibility of limiting the purchase of homes only for habitual residence, a measure inspired by European cities like Amsterdam. The report considered it feasible to limit the purchase of homes when they are not intended for the buyer's habitual residence, but with some exceptions. On the other hand, MÉS considers that the European Commission's affordable housing bill establishes a common European framework and an objective methodology that, if approved, will provide more legal coverage for its demands. This regulatory framework must provide tools to local and state institutions so that city councils can restrict tourist rentals and the purchase of second homes.

"The European Commission's proposal gives room to intervene"

The professor of Public International Law at the UIB Joan David Janer highlights that the European Commission's proposal provides guidelines to state administrations to "adopt measures that do not conflict with community regulations". "It provides a margin to intervene," he explains: "We find that there is a housing problem in many of the member states, and administrations could have a fear of applying measures that might not be compatible with the free provision of services". Thus, he considers that the proposal provides "a minimum legal certainty, both to the state and to the autonomous communities". In this sense, he points out that what comes into play in the rule is not nationality, "but rather prioritizing that residents can access housing". On the other hand, he warns that limiting the purchase of second homes "is not simple to fit in, because the right to private property comes into play".

However, he rejects that, for the moment, this proposal provides any coverage. "For now it is a draft proposal that must begin to be processed," he warns. On the other hand, without going into the substance of the bill from MÉS per Mallorca, he considers it, a priori, "maximalist," and questions whether it has a place within the Spanish constitutional framework. "The Parliament of Catalonia adopted a regulation that aimed to limit second homes in Catalonia, and the Council of Statutory Guarantees told them unanimously that it was unconstitutional", remember. The Generalitat has set out to promote changes to the law to avoid the risks pointed out by the Council of Statutory Guarantees. According to Janer, the ecosovereignists' proposal "clashes with the right to private property, free intervention, and the housing market".