The European Court of Justice has given national governments broader powers to regulate short-term rentals, but political resistance in Italy is slowing down efforts to implement stricter rules. The ruling, issued on October 22, 2026, clarifies that EU member states can require prior authorization for short-term rental operations under specific conditions, including environmental protection and housing scarcity.
The decision stems from a Belgian case involving a Brussels-based property company denied permission to operate a short-term rental in the capital. The Court ruled that occasional tourist rentals qualify as a service under EU law, meaning national regulations can apply even when private individuals offer accommodations. The ruling emphasizes that restrictions must be non-discriminatory, proportionate, and based on clear, publicly available criteria.
Local authorities can now assess the impact of short-term rentals on housing shortages and population density before granting approvals. The Court rejected the idea that post-authorization controls would suffice, stating that proactive oversight is necessary to prevent harm to urban housing markets.
While the legal framework now supports stricter controls, Italy’s Senate has pushed back against the Affordable Housing Act, a proposed EU measure aimed at addressing housing shortages. On October 28, the Senate’s European Union Affairs Committee approved a resolution criticizing the act for overstepping EU competences and interfering with national housing policies. The resolution argues that local markets vary widely and that interventions should reflect territorial differences.
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The Italian government’s Ministry of Infrastructure and Transport has also expressed skepticism, favoring measures like reclaiming vacant properties and supporting residential investments over blanket restrictions. The ABBAC, Italy’s national extralberghiero (non-hotel) association, welcomed the Senate’s stance, arguing that short-term rentals should not be automatically blamed for housing crises.
Instead of outright bans, ABBAC proposes redirecting up to 20% of tourism taxes toward residential housing funds. These revenues could cover rental subsidies, anti-eviction guarantees, and incentives for property owners to convert unused buildings into long-term housing. The association stresses that tourism can contribute to urban revitalization, particularly in historic centers, and should not be treated as the sole cause of housing challenges.
The legal shift toward regulated short-term rentals contrasts with past EU approaches, where member states often relied on voluntary self-regulation or local ordinances. The 2026 ruling marks a stronger central role for national governments in managing the sector, though political divisions, like those in Italy, may delay implementation. Cities like Naples, which recently tightened zoning rules for short-term rentals, could serve as test cases for how the new framework plays out in practice.