By Francesca Moretti-Lane · Regulatory Affairs Correspondent
If you're buying a property in 2026 with the intention of generating short-term rental income, regulatory risk is now a primary due diligence item. In the past 18 months, several of the world's most popular holiday rental markets have introduced significant new restrictions, and the political direction globally is toward tighter regulation rather than looser. Understanding what's changed, and how to assess risk in markets you're considering, is no longer optional.
Barcelona: the most dramatic restriction
Barcelona has gone furthest of any major city. The city's mayor has announced that it will not renew any of the approximately 10,000 existing short-term rental licences when they expire at the end of 2028, effectively banning tourist apartments in the city. New licences have not been issued since 2014. The practical effect: any property you buy in Barcelona today with the intention of short-term rental has a defined end date for that use, and the property's rental income value is declining. Secondary market prices in neighbourhoods where STR income was a primary driver (Eixample, Gràcia, El Born) have already adjusted downward.
This is not a minor regulatory tweak — it is the first major European city to commit to eliminating tourist apartments entirely. It is a significant signal for buyers evaluating other major European cities.
Amsterdam: tighter caps and shorter seasons
Amsterdam reduced the maximum number of nights a property can be rented short-term from 60 to 30 nights per year in 2023. The rule applies throughout the city, including in areas previously excluded. Registration is mandatory, enforcement has increased (the city employs dedicated STR inspectors), and fines for non-compliance run to €13,500 or more. For buyers hoping to generate meaningful rental income from an Amsterdam property, 30 nights per year makes a conventional STR business model impossible.
Lisbon: licence freeze and primary residence rules
Lisbon suspended the issue of new Alojamento Local (AL) licences for apartments in most of the city in 2023. Existing licences can be sold with the property, which has created a premium for licensed properties and a secondary market in AL licences. Some areas outside the historic core remain open for new licences. The practical guidance: if you're buying in Lisbon specifically for rental income, check whether the property comes with a transferable AL licence before proceeding — and verify the licence is current and valid, not lapsed. Properties without a licence cannot be legally rented short-term in the licensed zones.
Buying a Lisbon property with an existing Alojamento Local licence typically adds 5–12% to the purchase price relative to equivalent unlicensed properties. In licence-frozen zones, this premium is likely to increase further.
Bali: the foreign-buyer restriction
Bali's regulatory situation has become significantly more complex for foreign buyers. Indonesian law prohibits foreigners from owning freehold land or property, which has always meant that Bali investment was structured through long-term leases (typically 25–30 years with renewal options). In 2024, the Indonesian government moved to close or restrict the use of nominee ownership structures (where a foreign buyer owns through an Indonesian nominee), which had been a common workaround.
For buyers operating legitimate villa rentals through a properly structured PT PMA (Foreign Investment Company) or similar, operations continue normally. Buyers in informal nominee arrangements face legal uncertainty. The Bali villa rental market remains active and profitable, but the regulatory and legal structure you use to access it has never mattered more.
New York: the most restrictive major market
New York City's Local Law 18 came into full effect in 2023, requiring all short-term rental hosts to register with the city and be present during any guest stay. This effectively bans the ‘empty flat’ short-term rental model that drove Airbnb income in the city. The number of legally operating Airbnb listings in New York fell by approximately 80% in the months after the law came into effect. For buyers considering New York investment property, STR income is no longer a viable assumption.
Markets where regulation remains relatively permissive
The Algarve, most of Spain outside Barcelona and major cities, Thailand (for properties structured through the proper legal vehicles), much of the Caribbean, Mauritius, and the UAE all operate with STR frameworks that range from permissive to structured-but-navigable. These markets are attracting buyer interest precisely because they haven't followed the Barcelona direction.
In Thailand specifically, the legal landscape requires a hotel licence for formal STR operation, but enforcement varies significantly by location and property type. The Algarve's AL (Alojamento Local) framework still issues new licences in most areas outside Lisbon city, making it one of the more accessible European STR markets remaining.
How to assess regulatory risk before you buy
Ask three specific questions before any purchase where rental income is material to your investment case: Is STR currently legal in this specific area for this property type? Has the local government proposed any restrictions in the past 24 months? Does the property come with any existing licence or registration that transfers on sale?
The first question is factual and your lawyer should answer it. The second requires reading local news and political commentary, which most buyers don't do but should. The third is a contractual due diligence item that your agent and lawyer should flag.
Regulatory risk is not a reason to avoid rental income properties. It is a reason to price it into your purchase decision, buy in markets with stable regulatory frameworks, and structure your investment in a way that has value even if the STR model is constrained in future.