Can regulation kill a market or make it more valuable?

As policymakers balance affordability with fiscal stability, the question is no longer whether red tape matters, but whether it stabilises or stifles. 

The Red Tape Tracker in this year's European Lifestyle Report  shows a marked uptick in regulatory activity across all major markets, from wealth taxes and exit levies to holiday rental reforms and ESG requirements.

London offers a cautionary case study. Successive stamp duty changes, non-dom reforms and the threat of further taxation have cooled prime sales volumes by over 20% since 2022, according to my colleague Tom Bill, while redirecting some international capital toward more predictable regimes in Lisbon, Geneva, Monaco and Milan. 

Yet regulation hasn’t erased value, it has reframed it. In tightly regulated markets like Chamonix , stricter zoning under new planning rules has turned scarcity into an advantage, with chalets offering extension potential now commanding notable premiums, according to The Alpine Report 2026.

Elsewhere, for many Barcelona has become a test case for regulatory overreach. Alongside a 40% cut in short-term rental listings, new rules mandating 30% affordable housing in developments and fines for vacant homes have cooled investor appetite, slowed new construction, and raised concerns that supply constraints could deepen rather than ease affordability pressures.

Italy’s flat tax for new residents, though rising to €300,000 in 2026, still anchors inward investment by offering predictability, assuming no further changes. 

Across the continent, wealth and exit taxes, from Germany to Norway, underline a growing political desire for transparency, revenue, and voter-friendly affordability.

Looking ahead, Europe’s mounting debt and political pressures along with its ESG commitments will only tighten the regulatory net. The European Commission’s upcoming holiday rental rules, forcing platforms like Airbnb to share host data, and the growing push to phase out Golden Visas mark a clear shift toward transparency and control. 

For HNWIs, developers, and investors, that’s both a blessing and a curse. Clearer rules can build confidence and favour long-term capital investment, constant policy shifts, however, risk stifling momentum and blurring strategy.