Before buying a second home in Europe, establish what you will still be allowed to do with it in ten years.
If you are buying a second home in Europe this year, your advisers can usually establish quite quickly whether you are legally entitled to purchase it. That still matters, but it no longer settles the most consequential part of the decision. The greater uncertainty is what you will be permitted to do with the property five or ten years after completion.
Since 20 May 2026, a new EU framework has made short-term rental activity considerably more visible to public authorities. At the same time, municipalities are tightening letting rules, increasing second-home surcharges and reconsidering how much residential stock should remain available for tourist use. Your due diligence therefore needs to move beyond the deed. You need to understand the direction of the jurisdiction that will govern the property throughout your ownership.
Conventional due diligence answers a familiar set of questions. Does the vendor own the property? Is the title clear? Are there charges against it? Do the permissions correspond with the building as it stands? And can you, as an international purchaser, legally acquire it? Your lawyer or notary should establish those points before you complete.
However, those answers describe the property at a particular moment. They do not necessarily tell you what the property will be permitted to do throughout your ownership. Letting rights can change, local tax surcharges can increase and buildings can impose their own restrictions on tourist use. A licence that exists when you purchase may also disappear later.
That does not mean your conveyancer has missed something. Their job is to establish the legal position you are acquiring today. If you are buying a second home, you now need an additional layer of investigation: what powers do the local authorities have over your intended use, and how actively have they been exercising them?
Regulation (EU) 2024/1028 has applied since 20 May 2026. Where a member state operates a short-term rental registration scheme, each relevant property requires a registration number. That number must appear on its listings, while platforms are required to remove listings without a valid one. Registration numbers may also be suspended or withdrawn when the information behind them is incomplete or inaccurate.
More importantly, platforms now transmit activity data every month. That information includes nights booked, guest numbers, guest countries of residence, the property address and the listing URL. Consequently, enforcement no longer needs to begin with a neighbour reporting an unauthorised rental. Authorities can receive a continuing record of how registered properties are actually being used.
If rental income forms any part of your reason for buying a second home, that distinction matters. Ownership and permission to operate short-term accommodation are separate rights. The first can be secure while the second becomes progressively more regulated.
The change is already visible in several major European cities. During the twelve months to April 2026, active short-term rental listings fell 22.9% in Paris, 15.3% in Madrid, 11.6% in Barcelona and 5.5% in Lisbon. Rome, by comparison, was broadly flat after Italy introduced its national identification code in January 2025.
That gives you a useful way to read regulation. The most predictable destination is not necessarily the one with the fewest restrictions. A market that has already introduced its framework and absorbed the adjustment can be easier to assess than one approaching its first significant round of intervention.
Rome is instructive for precisely that reason. Its market has already had time to adapt to a national identification system, while the larger contractions elsewhere suggest a more active adjustment is still occurring. When buying a second home, establish where the destination sits in that cycle before assuming today’s rules represent a settled position.
France is useful because the regulatory exposure does not come from one rule. Under the loi Le Meur, communes can reduce the annual letting limit for a primary residence from 120 nights to 90. Penalties can reach €15,000, while municipal authorisation for change of use may also be required in certain areas. National registration became compulsory on 20 May 2026, and mayors can suspend or revoke registration numbers.
Municipal permission is only one layer. Co-ownership bylaws can now expressly prohibit tourist letting, which means an apartment may sit in a city that permits short-term use while the building itself prevents it. Tax treatment has changed too. For unclassified tourist lets, the micro-BIC threshold has fallen to €15,000 with a 30% flat deduction, while classified properties retain a materially different regime. Energy requirements are also tightening over time.
So if rental income contributes to your purchase case, obtain the co-ownership bylaws before you offer. Read the letting provisions before discussing projected occupancy and yield. A revenue forecast is irrelevant if the building documents remove the activity on which the forecast depends.
Rental regulation is only one part of the exposure. France also demonstrates how the cost of simply owning a secondary residence can change without any change in how you use it.
In 2026, 1,666 of the 3,689 eligible French communes applied the second-home council tax surcharge. That proportion has continued to rise from previous years, while 688 communes applied the maximum permitted surcharge of 60%. The available range runs from 5% to 60%.
The regional concentration is even more revealing. In Brittany, 84.6% of eligible communes apply the surcharge. Nouvelle-Aquitaine follows at 67.9%, while Pays de la Loire stands at 65.1%. Crucially, the surcharge applies whether the property is let, occupied by you or left empty.
When buying a second home, model these charges as recurring ownership costs rather than incidental taxes. Then examine the municipality’s recent history. A destination that has already moved from no surcharge to 20%, and then from 20% to 40%, is telling you something about the direction of local housing policy.
Barcelona shows what happens when a city decides to remove an entire category of tourist accommodation rather than merely make it harder to operate. The city plans not to renew more than 10,000 tourist apartment licences when they expire in November 2028. Its stated objective is to return those homes to ordinary residential stock.
The lesson for you is straightforward. A tourist licence may add value today, but it should not be treated as though it were an inseparable feature of the property. It remains a regulatory permission.
Therefore, if a seller’s valuation depends materially on an existing tourist licence, calculate the property again without it. If the result changes significantly, part of the purchase price is attached to a permission whose duration you do not control.
That does not necessarily make the acquisition unattractive. It simply tells you where the risk sits.
Most of the additional due diligence can be done before an offer becomes difficult to unwind. The point is to ask the questions while you still have negotiating freedom, rather than discover the answers once you are already committed to the transaction.
Establish whether short-term letting is permitted at all. If it is, identify the applicable registration system and confirm whether the property already carries a valid registration number. Then determine whether that number transfers with ownership and whether renewal is automatic, conditional or discretionary.
Do not rely on the fact that the current owner is already advertising the property. Current use and lawful future use are different things. Even if you have no intention of renting, preserving that flexibility may still matter to the eventual buyer.
Examine the powers the municipality currently holds and, more importantly, what it has actually changed during the previous three years. Look at letting limits, change-of-use rules, registration requirements and tax measures.
A municipality with wide theoretical powers but a stable policy history presents one type of risk. A municipality that has intervened repeatedly presents another. You do not need to predict local politics. Recent statutory decisions give you a more useful picture of the direction of travel.
Separate second-home taxation from the ordinary taxes attached to property ownership. Some jurisdictions and municipalities impose additional charges specifically because the residence is secondary.
Establish the current rate, the maximum permitted rate and whether the municipality has increased it before. Then model that number as a permanent holding cost. If you are buying a second home that will be occupied for only a few months each year, the surcharge continues whether you use the property or not.
For apartments and other co-owned properties, request the bylaws before making an offer. Municipal permission does not necessarily override private building restrictions.
In France, co-ownership bylaws may expressly prohibit tourist letting. Therefore, the city may say yes while the building says no. If rental flexibility matters to your ownership plan, this is one of the simplest checks to make and one of the most expensive to overlook.
Read the local housing policy as carefully as you read the tax schedule. If the authority has publicly committed to reducing secondary residences, restricting tourist accommodation or returning properties to permanent housing stock, establish what legal instruments it has available to pursue that objective.
The point is not to measure whether local residents appear welcoming. Sentiment is subjective. Taxes, licence restrictions and occupancy rules are measurable, and those instruments determine how your property can actually be used.
Finally, consider your eventual purchaser. If short-term letting is removed, every buyer who needs rental income disappears from your potential market. If second-home ownership costs rise materially, another group may reconsider.
That does not automatically reduce the value of the property. However, it can reduce the depth of demand and lengthen the time required to sell. Before buying a second home, understand whether the natural future buyer wants the property for its own qualities or for the uses attached to it.
Regulation affects assets differently. An interchangeable apartment whose acquisition case depends heavily on rental income is more exposed to restrictions than a scarce waterfront house, a protected historic residence or an exceptional home in a tightly supplied prime location.
In those markets, many buyers never intended to generate rental income. They are purchasing privacy, architecture, position and long-term scarcity. Consequently, removing short-term rental flexibility can matter far less to the buyer pool that actually determines value.
That distinction should influence where to buy a second home in Europe. A regulated destination can still be compelling when the property itself has sufficient scarcity to survive changes in its permitted use. By contrast, regulation deserves much more weight when the asset competes with hundreds of similar properties and relies on income-generating flexibility to differentiate itself.
Restrictions do not need to cause an immediate fall in property prices to affect you. The first consequence can be liquidity.
If a property loses letting flexibility, purchasers who require rental income leave the market. The remaining buyers may still support the same headline price, but fewer of them can mean a longer selling period. That matters particularly at the prime end, where transaction volumes are naturally thinner.
So do not ask only whether the property will be worth more in ten years. Ask who is likely to want it in ten years and whether those buyers still exist if today’s optional uses disappear.
The balancing point is equally important. In Europe’s most supply-constrained locations, the number of private buyers with no interest in rental returns may remain deep enough that regulation changes very little. That is why the correct response is not to avoid regulated markets. It is to distinguish property whose desirability depends on regulatory permission from property whose desirability survives without it.
If you are buying a second home, the regulatory investigation belongs at the offer stage. By the time conveyancing is well underway, you have already spent money, invested time and formed a view of the property. Discovering a restriction then may still protect you legally, but the information would have been considerably more valuable before you negotiated the price.
Your lawyer should still establish ownership, title, charges and permissions. Alongside that work, establish the durability of the uses you expect from the property. Review letting rules, building bylaws, second-home taxation, recent municipal decisions and the likely future buyer pool.
There are also circumstances in which the answer should be to walk away. If the acquisition only makes sense because short-term letting income is assumed, while the municipality is actively reducing tourist accommodation and the price assumes the licence will survive, the property is carrying a regulatory dependency you cannot control.
Conversely, a destination that is tightening its treatment of second homes is not automatically a poor place to own one. If you are purchasing something scarce, intend to use it privately and would still want it even if letting disappeared completely, local restrictions may have relatively little bearing on the decision.
The deed tells you what you have bought. The municipality increasingly tells you what you can do with it.
Italy, Spain and France are three of the strongest options, but for different reasons. Italy offers a relatively settled registration environment, Spain combines deep international demand with strong regional variation, and France remains compelling for scarce prime property. The specific municipality matters more than the country alone.
Second-home taxes vary sharply across Europe. At the higher end, French communes can add 5% to 60% to the local tax on second homes. By comparison, Montenegro typically taxes secondary residences at around 0.3% to 1.5% of assessed market value annually, while Croatia charges a comparatively modest local holiday-home tax per square metre. The exact burden depends on the municipality, property value and ownership structure.
Yes, if the property still makes sense without relying on favourable regulation. A scarce home bought primarily for personal use carries less regulatory exposure than a property dependent on short-term rental income. The strongest purchase is one you would still want if letting rules tightened or local taxes increased.
Generally, yes, although acquisition rules vary by country and nationality. The greater issue is often what you can do with the property after purchase. Before buying, check local letting rules, registration requirements, second-home taxes and any restrictions imposed by the municipality or building.
Often, but local rules determine whether short-term letting is permitted. Registration schemes, tourist licences, change-of-use requirements and building bylaws can all restrict rental use. Verify those rights before making an offer, especially if rental income forms part of your reason for buying.
They can reduce the potential buyer pool, especially where purchasers depend on rental income. The first effect may appear in longer selling times rather than an immediate price decline. For genuinely scarce properties bought mainly for private use, the impact can be much smaller.
Italy is further through the adjustment than several other major markets. Rome’s active short-term rental supply was broadly flat after Italy introduced its national identification code, while Paris, Madrid, Barcelona and Lisbon recorded declines. Markets that have already absorbed regulatory change can be easier to assess.
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