EU considers restrictions on second homes to tackle housing crisis

Economy cost-of-living crisiseueuropean parliamenthousingTop News EU considers restrictions on second homes to tackle housing crisis Cyprus Housing Prices Hit Ceiling As Market Slowdown Continues Relevant News EU considers restrictions on second homes to tackle housing crisis 9 September 2026 Two arrested after Nicosia driver rams victims, flees scene 9 September 2026 Cyprus has EU’s lowest suicide rate, Eurostat says 9 September 2026 Theodosis Pipis 9 September 2026 FacebookXWhatsAppEmailPrintViber The European Commission proposed new EU rules Wednesday that could make it easier for cities and national governments to restrict the use and purchase of second homes in areas facing severe housing pressure, while stopping short of creating an EU-wide ban on second-home ownership. The proposed Affordable Housing Act would establish the first common European framework for assessing housing measures that affect the EU’s single market, giving national, regional and local authorities greater legal certainty when they choose to intervene in housing markets under pressure. The Commission’s proposal says that in cities, metropolitan regions, islands and tourist destinations where demand significantly exceeds supply, “demand associated with certain forms of non-primary use of housing may aggravate affordability pressures in some local markets.” It then says those pressures can make it harder for residents to access affordable housing where they live and work. The proposal would allow authorities to assess measures affecting the acquisition or use of residential property, including restrictions on non-primary residential use, measures favouring owner-occupation or specified categories of buyers such as first-time or lower- and middle-income households, and measures addressing long-term vacancies. But the Commission stressed that the proposal itself does not give governments a new right to restrict property purchases or impose second-home limits. Instead, it sets out common requirements that authorities must meet when adopting measures that are already available to them under national law. Housing policy remains primarily a national, regional and local responsibility. Restrictions would also have to respect legal certainty and legitimate expectations, meaning that conditions attached to property acquisition could not be applied retroactively and appropriate transitional arrangements would have to be provided. That could be significant for prospective second-home buyers in some of Europe’s most expensive housing markets. A city or region that already has the authority under national law to restrict the purchase or use of second homes could have a clearer EU framework for demonstrating that such a measure is justified by local housing conditions. The Commission’s proposal specifically says measures could include restrictions on non-primary residential use, requirements reserving affordable residential property for owner-occupation or certain categories of households, and declarations about the intended use of a property before acquisition. The proposal does not, however, mean that second-home owners across Europe will be required to sell their properties. The Commission says existing property rights remain protected and that measures must take account of legitimate expectations, transitional arrangements and the principle of proportionality. The proposal itself does not establish any restriction on property ownership. Short-term rentals are another major part of the initiative. Under the proposed rules, restrictions on short-term rentals would have to target activities that reduce the housing stock available for long-term use, particularly where their scale, frequency or commercial nature contributes to housing pressure. Authorities would have to demonstrate that short-term rentals have had a significant adverse effect on housing affordability or availability for at least three years and that less restrictive measures would not be equally effective. They would also have to implement existing EU rules requiring registration and the removal or disabling of non-compliant listings. The Commission’s move comes amid growing concern over housing affordability across the bloc. House prices in the EU rose 64.9% between 2015 and the fourth quarter of 2025, while rents increased 21.8%, according to Eurostat. Furthermore, more than half of people living in European cities consider housing an immediate and urgent problem in their area, according to the latest Eurobarometer cited by the Commission. The Commission said the housing shortage is also affecting Europe’s economy by limiting workers’ ability to move to where jobs are available and students’ ability to live near educational institutions. The new act is intended to address the immediate pressures on existing housing stock while a separate Commission recommendation focuses on increasing supply. That recommendation calls on authorities to accelerate planning and permitting, make more land available for housing, renovate and repurpose buildings and increase investment. The Commission said authorities should use so-called Housing Acceleration Plans to concentrate efforts in areas where shortages are most severe. The Commission has stressed that increasing supply remains essential. Its housing strategy estimates that Europe needs more than 2 million additional homes a year to keep pace with demand. The proposal therefore represents a shift from simply debating whether restrictions on second homes and short-term rentals are compatible with EU law toward establishing a common test for when such restrictions can be justified. For property owners and investors, the immediate effect is limited because the act does not itself introduce new restrictions on ownership. But if the legislation is adopted, governments and cities that already have the power to regulate second homes could have greater confidence in introducing targeted measures in housing-stressed areas. The proposal will now go to the European Parliament and the Council of the EU for negotiations under the ordinary legislative procedure. It must be agreed by both institutions before it can become EU law. 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