A city may require prior authorisation for the operation of short-term rental accommodation, but simply invoking the protection of housing or guests is not enough. Authorities must demonstrate why such a measure is necessary in the specific area concerned and why a less restrictive solution would not be equally effective. This is the key message from the ruling of the Court of Justice of the European Union of 22 October 2026 in the Smartflats case (C-813/24).
The dispute began when Smartflats, an apartment management company, challenged the rules applied by the Brussels-Capital Region. To register a property as tourist accommodation, an operator must provide a certificate of planning compliance issued by the municipality. In some cases, obtaining this certificate first requires a permit for a change of use. The CJEU ruled that when a planning requirement operates as a condition for starting an activity, it must be assessed under the EU Services Directive.
What authorities must demonstrate
Housing protection can justify a prior authorisation requirement, but what matters is where the measure applies and what specific problem it is intended to address. According to the CJEU, a study showing a significant impact of tourist rentals on housing availability or rents may constitute a strong indication of housing pressure. However, there is a difference between a rule targeting neighbourhoods where the problem has been identified and one applied across an entire region. The Brussels Court of Appeal will also have to consider whether a simple declaration followed by subsequent checks could achieve the same objective.
The Court made specific reference to primary residences. Where an owner or operator temporarily rents out the home in which they live, or rents out only part of it, protecting the long-term rental market does not in itself justify requiring a certificate of planning compliance. This does not amount to a general exemption from other obligations, such as safety requirements.
What operators should know before applying
For a professional operator, the practical issue is whether they can know in advance when a certificate or change-of-use permit is required, how long the process will take and what options are available if an application is rejected. The CJEU requires clear and objective criteria, a reasonable deadline known in advance, a reasoned decision in the event of refusal and the possibility of appeal.
The ruling neither approves nor invalidates the Brussels regime as a whole. The Court of Appeal will apply the CJEU’s criteria to the specific case. If it finds that the requirement for the certificate is incompatible with the Services Directive, it will have to consider whether that requirement can be set aside without affecting the rest of the regulatory framework.
How the EHHA responded
The European Holiday Home Association (EHHA) welcomed the ruling. Its Secretary General, Catherine Starkie, stressed that cities must demonstrate the necessity and proportionality of the restrictions they impose. The association also called for the CJEU’s reasoning to be taken into account in the European debate on affordable housing.