Cities may make short-term rentals subject to prior authorisation to protect housing, but the scheme must be necessary, proportionate and based on clear rules, the Court of Justice of the European Union ruled on 22 October 2026.
The case, Smartflats v Région de Bruxelles-Capitale (C-813/24), was referred by the Brussels Court of Appeal. Smartflats, a company that let out a Brussels building to tourists, was ordered to stop because it had no registration. It was later told it also needed a municipal certificate confirming that the use complied with planning rules. That certificate depended on a planning permit, which Smartflats had not applied for. In Brussels, changing a “dwelling” into a “hotel establishment” can require such a permit.
The Court held that the EU Services Directive (2006/123) applies to planning rules when they form part of a prior authorisation scheme for tourist accommodation. Such a scheme can be justified by protecting tourists and the urban environment, including housing. It must be necessary, taking account of its geographic scope and its effect on local housing needs, and the aim must not be achievable by a less restrictive measure.
The criteria must be clear, objective, published in advance and accessible. A municipality may keep some discretion only if it is limited and protected against arbitrary use. The procedure for the planning certificate needs a reasonable time limit set in advance, reasons for any refusal and a right to challenge a refusal. If a single condition breaches the Directive, only that condition is set aside, provided it can be separated from the rest of the scheme.
The Court did not decide whether the Brussels rules are lawful. That is for the Brussels Court of Appeal.
What it means for buyers
The ruling interprets EU law that applies in every member state, including Greece, but it does not assess any Greek rule. In Greece, first registrations in the short-term rental register have been banned since 1 January 2025 in the 1st, 2nd and 3rd municipal districts of Athens, under Article 111 of Law 4446/2016, and since 1 July 2026 in the 1st municipal community of Thessaloniki, as the government’s housing portal also states.
The end date in force is 31 December 2026 for both areas. Article 111, as amended by Law 5313/2026, allows a joint ministerial decision to extend it. A property in these areas that is transferred during the owner’s lifetime is removed from the register and cannot re-register while the ban lasts. For a buyer, the exact address therefore decides whether the property can be registered for short-term letting. Our guide to short-term rental rules in Greece sets out the wider framework. Buyers should confirm how this applies to them with a Greek lawyer or accountant.
What happens next
The case returns to the Brussels Court of Appeal, which will apply the Court’s answers to the facts.
Sources
- Court of Justice of the European Union: Case C-813/24, Smartflats, judgment of 22 October 2026
- EUR-Lex: Opinion of Advocate General Campos Sánchez-Bordona in Case C-813/24, 5 February 2026
- Greek housing policy portal (stegasi.gov.gr): Temporary restrictions on short-term rentals
- Law 5313/2026, Article 5 (Government Gazette A 102/25.06.2026)
- Law 4446/2016, Article 111, as amended
- Joint ministerial decision 225563 ΕΞ 2025 (Government Gazette B 7200/31.12.2025)
