A property buyer’s guide to Ibiza
Ibiza is an idyllic and tranquil island. However, buying property in Ibiza can often be needlessly protracted. In preparation for your search, arm yourself with this buying property in Ibiza guide.
Buying a property in Ibiza is a rewarding purchase. The Balearic lifestyle has broad appeal, from its sunny climate, relaxed pace of life and vibrant mix of people. Whether it’s a seasonal holiday home or a permanent island escape, our extensive portfolio of on and off-market homes is waiting for you to make your mark.
The housing market in Ibiza has always attracted high levels of interest from international buyers. But the last two years have seen demand soar to unprecedented levels. Furthermore, purchasing property in Spain comes with certain hurdles – and Ibiza is no different. Whether it’s surprise taxes, unexpected planning problems or even just understanding the acquisition process, it certainly helps to have an expert on board.
Our team has more than 25 years’ experience in Ibiza. We list exclusively and can offer access to the best homes on the island. We can help you navigate the purchasing process and introduce you to our network of partnered planners and legal representatives as well as leading architects and designers. Our deep consideration of your ambitions will ensure you end up with the perfect property.
Read our buying property in Ibiza guide to learn more about the process and ensure the route to your perfect island home is as streamlined and enjoyable as possible.
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“It’s best to keep your thoughts on location as broad as possible and let the property specifics guide you – such as the number of bedrooms or amount of outside space.”
Ibiza is a vibrant place of diverse lifestyles and locales. Before you begin your search, get to know the island as much as possible. We have a series of area guides to help familiarise yourself with the towns and villages of all five municipalities.
It’s best to keep your thoughts on location as broad as possible and let the property specifics guide you on what to view – such as the number of bedrooms or amount of outside space – rather than location. If you’re buying as an investment, our team can help navigate the tourist hotspots and competition to determine the smartest areas to place your money in. But perhaps it’s the local community and schools, countryside quietude or proximity to the beach that is driving your search. No matter how you want to live in Ibiza, keep an open mind and let our team of island insiders guide you to pockets both known and unexpected.Explore our area guides
Buying a used property
The history of real estate development in Ibiza is complicated. Over the last 50 years, a multitude of properties were built or extended without the correct licenses. While this shouldn’t be a reason to reject an interesting opportunity, it’s important to understand that the potential of a previously owned property will depend on its specific circumstances and background.
It is normal to find some, especially with older properties. If there are elements that were built without the correct licenses, this may not pose a problem. If you are looking to undertake work, factors such as the age of the building, the category of land it is on and when any previous work took place can affect what might be possible to achieve in the future. This is all dependent on your ambitions and the level of work required to accomplish the final result.
Furthermore, it is important to ensure that there are no existing infractions or charges on the property. If there are, these should be paid prior to sale so they are not inherited.Read about Will & George's journey
Buying a new property
Buying a new home can be an attractive option and Ibiza offers a wide range of choices. For those considering this route, there are a number of benefits, particularly when securing a property off-plan. This tends to be a simpler buying process and affords greater flexibility. Generally speaking, if you commit to purchasing a new development in the early stages, you will have the option of working with one of the island’s foremost architects to tailor significant elements such as the distribution of rooms.
The energy efficiency of a new build is also likely to be superior when compared with an older property. However, depending on the scope of the project and the developer, it may be possible to influence the choice of materials and equipment to create an even more energy-efficient home. Or you may prefer to look at projects that are closer to completion, with a guaranteed move-in date and where you can still choose the fixtures and fittings to suit your taste.
Off-plan properties are also generally structured with attractive payment plans that phase your investment but also allow you to secure a price now with the potential upside of the value increasing before completion.
The benefits of buying a new build are plain to see. But it’s important that you fully understand the terms of the purchase contract. You will want to know what the developer is guaranteeing and be sure there’s no hidden small print that impacts you significantly should the timeline or budget move during the build. This could be due to unexpected works or increases in the cost of materials. That said, delays do happen so some flexibility as a buyer is important.
Lastly, consider that your mortgage will have a validity period so it’s important to apply at the right time to ensure you are not forced to make a new application before completion.
In recent years, it has become harder to build on rustic land as the local government has tightened regulations in order to preserve areas of the island from significant developments. While minimum plot sizes for planning have been increased, maximum buildable areas have been decreased.
Applying for planning permission for a project on rustic land can be a long process. We have a trusted network of professionals to get an early indication of what may be possible. We advise that careful consideration is given to acquiring anything that does not already have the building license in hand or where a developer cannot demonstrate the process is well advanced with a clear and realistic timeline for receiving the relevant permissions.
The end result of a conversation-starting property on rustic land is the ultimate ambition for many in Ibiza. With the right advice and a little patience, it is very much achievable.
Urban land offers a more straightforward process for planning, with shorter timelines for permission and the opportunity to build bigger properties on smaller plots. There are many areas of urban land on the island, ranging from populated towns to areas that have been urbanised for development, such as the gated communities Roca Llisa and Vista Alegre. With opportunities at all stages of completion and, generally, a phased payment for the buyer, urban areas can deliver outstanding properties for all budgets – potentially with savings on purchase taxes.
View Can Ambel
“We were patiently given objective and practical advice after viewing a dozen homes on the island. Domus Nova's recommendations for service providers including legal, banking, and tax advice proved invaluable.“
- U.K based buyer, Can Ambel
Running your search
There are several ways to approach a property search in Ibiza. Some choose to cast the net wide, register their name with multiple agents and through various portals, then see what comes back. While this may seem to maximise options, in practice it is inefficient, impersonal and tends to deliver poor results.
It’s best to build a trusted relationship with one or two agents who you resonate with and let them represent your search. Good agents value this approach and have a network of trusted partners and routes into off-market opportunities. This will fast-track the purchasing process.
When you travel to the island, set aside some time just for viewings. While it is tempting to spend time at Ibiza’s golden beaches and coveted restaurants , dedicating time to your property search will be rewarding in the long-run.Looking to buy? Talk to us
You may be interested in developing a rental income from your Ibiza property. To legally promote and rent a property for short stays (which are defined as a tenancy of less than one month), the property will need a valid tourist license. For longer tenancies, there is no license requirement.
Some properties will already have an older tourist license that does not expire. The more recent type of license is the ETV365, which expires every five years and must be renewed after this period.
Currently, there is a moratorium on applications for new tourist licenses meaning it is not possible to apply for one. It is not known if or when this will change. Previously, the following conditions were required, so it is likely a similar process will apply should new licenses be granted in the future:
- Valid certificate of occupancy known as a Cedula de Habitabilidad
- It must be within a tourist zone
- The property must be at least five years old and have been used as a private residence
- There must be a valid energy certificate
- There must have been no previous infractions of the holiday rental licensing laws
1. Property transfer tax
Resale/used properties bought from an individual are subject to a transfer tax known as ITP, similar to UK stamp duty. For properties more than €1,000,000 in the Balearic Islands, the tax rate is 11%. The rate is based on the declared sale price and variable up to €1,000,000 – as below.
- Up to €400,000 (8%)
- €400,000 to €599,999 (9%)
- €600,000 to €999,999 (10%)
- €1,000,000 and above (11%)
ITP is accumulative so the first €400,000 is charged at 8% and adjusts at each point until the full 11% from €1,000,000.
2. Value added tax (IVA)
For new properties of first occupancy, ITP does not apply. Instead, IVA must be paid. For residential properties, the tax rate is 10% of the declared sale price. For land, commercial premises and garages/storage rooms, the rate is 21%.
In addition, when IVA is paid, there is usually an alternative stamp duty known as AJD with a tax rate of 1.5%.
3. Other purchase costs
Lawyers’ fees are usually based on the purchase price at 1% to 1.5%. Notary and property registry fees are paid by the buyer. These are usually around 1% of the purchase price.
1. IBI property tax
IBI tax is paid by all property owners whether resident or non-resident. The tax base is calculated on the cadastral value of the property. This is the perceived capital value given by the town hall of the relevant municipality and is usually much lower than the actual market value (possibly 50% or less). IBI tax is between 0.3% and 1.1% of the cadastral value, depending on whether it’s on rural or urban land and which municipality it’s in.
2. IRNR/IRPF income tax for non-residents
IRNR is a form of income tax that must be paid by all non-resident property owners. If the property is not rented, a base is assumed and the tax rate applied. In this case, the tax base is 1.1% of cadastral value at a tax rate of 19% for EU residents and 24% for non-EU residents.
IRPF is the standard income tax paid by residents but applied only to the income of the rental property, less expenses. As above, the tax rate for this is 19% for EU residents and 24% for non-EU residents.
3. Wealth tax
Like IBI, wealth tax is paid by all property owners whether resident or non-resident. As of January 2024, the tax-free allowance is €3,000,000 after which, the tax rate is on a sliding scale. For non-residents, it ranges from 0.2% to 3.5% (see table below). The tax is based on the net value of the asset after deductions of the mortgage. For this reason, it can be worthwhile looking at refinancing after purchase.
Rather than using the table of the Autonomous Community, non-residents are welcome to use the more tax-efficient State table, illustrated below. This information is true at the time of publishing.
|Net Tax Base (€)
|Remaining Taxable Base up to
This is a requirement for anyone outside the EU purchasing in the Balearic Islands. Essentially, it’s a background check so unless there is anything of note to raise a red flag, the permission is a formality.
This is an individual tax number which you will need to pay purchase and annual taxes.
Local bank account
Although this is not required, it’s much cleaner to have one so you can set up the payments locally.
Buying property in Ibiza is a nuanced process. There are many steps, but it doesn’t need to cause a headache. Expert help will serve you well on your journey and the right agent will also grant access to options you may otherwise never hear about.
At Domus Nova, our consultative approach means we have a deep understanding of buyers’ needs. There are numerous examples of grateful clients such as Georgina and William, who were able to find an off-market villa with our help.
“After spending time with my partner and I to understand our requirements, Rupert arranged for us to view a dozen or so properties, mainly in the centre and north of the island,” a previous client explains. “Throughout the process, we were patiently given objective and practical advice until we reached our final decision. In addition, Domus Nova’s recommendations for service providers including legal, banking, and tax advice proved invaluable.”
To browse the best of design-forward living on the island, explore our villas. To find out about our off-market options or to discuss your needs, get in touch. We have many years of experience on the island and are always happy to share our knowledge.Starting your search? Let's talk