Buying Property in Ibiza
Purchasing your dream home in Ibiza usually begins with a lot of fun! From researching different areas, towns & resorts, to comparing various types & styles of property – to actually going along to viewings…. Walking around each home & imagining either living your life there or perhaps spending long summers in a beautiful getaway home.
We have created a guide to buying property in Ibiza.
When it comes down to the nitty gritty of actually buying your home though – there are many other things to consider in order to make the process as smooth as possible. Here are some of the most popular questions we are asked by our buyers…..along with some simple answers which we hope you will find useful!
What costs (including associated costs) are involved when buying a property?
In addition to the agreed property price, there are various other costs & taxes which need to be paid when buying a property in The Balearic Islands. Generally speaking, on Ibiza you will pay about 12% of the property’s purchase price, which includes taxes & other obligatory charges. For a full breakdown of these costs – please refer to our ADDITIONAL COSTS page.
What is the property buying procedure in Spain?
Before you begin the buying process, you will need to obtain a fiscal number (numero de identificacion de extranjeros) also known as an NIE number. The NIE is your all-purpose identification & tax number in Spain. It is mandatory for all non-residents to obtain prior to signing the Deed of Sale (Escritura). Your lawyer can help you to obtain one if you don’t already have one.
Once you have decided on your home, there are three main steps involved…
Step 1 – Acceptance of your offer & Preliminary negotiations
Once you’ve made an offer & it has been accepted by the owner, the owner will be contacted on your behalf, to initiate negotiations regarding the terms and conditions of the sale. The sale price will be formally agreed, along with other conditions, such as any maintenance works to be done to the house, furniture arrangements, the selling date etc. At this stage, this is a non-binding process which means you are not legally bound to continue with the purchase if you change your mind.
Step 2 – Initial contract (pre-sales agreement) & Holding deposit
Your lawyer will undertake relevant checks on the property which includes checks at the local land registry, town hall & tax office to make sure the property is free from any problems & also to make sure that the seller owns the property. Your lawyer will then prepare the initial option to purchase contract (Contrato Privado de Compraventa) & will arrange for it to be signed once you are both happy with the terms (agreed price, names of buyer & seller, deposit amount, date before which contract must be completed). You will then pay a holding (or “reservation”) deposit. This can vary, but is usually around 10% of the agreed sales price. If you, as the buyer, breach the contract – you will forfeit your deposit. If the seller breaks the contract – they are required by law to pay you twice the deposit amount, less any legal fees that may be applicable.
Step 3 – Sales contract
Firstly you will need your NIE number. To save time, another way to obtain this is with the help of the services of a Gestoria. On the agreed sales completion date, the balance of the purchase price plus all fees payable including notary’s fees, taxes & duties must be paid by the buyer. Payment is made by banker’s draft or bank transfer, so foreign buyers are required to set up a Spanish bank account & transfer the money from a bank in their home country.
How do I go about getting myself a lawyer in Ibiza?
We strongly recommend you instruct an independent, English-speaking lawyer in Ibiza who has experience in advising overseas clients in relation to property purchases on the island. It is never too early to get organised & make initial contact with a lawyer, even if it is to get them to provide you with a quote for legal fees & that way you will be able to budget for this additional cost right from the start. You also have the option to instruct your lawyer with a “Power of Attorney” which means (if necessary) they can deal with matters on your behalf when you’re not in Ibiza. Please see our PROPERTY SERVICES page for more information.
What if I need a mortgage?
If you require a mortgage on your property in Ibiza, firstly you need to make sure that you are able to obtain a mortgage & secondly (very important) you need to confirm how much you can actually borrow. Please see our PROPERTY SERVICES page for details of our recommended mortgage advisor who will happily give you a ballpark figure over the phone.
How do I go about transferring funds from my UK account to my new overseas account?
By using a currency specialist, rather than the bank, to transfer your money from pounds to Euros – it could genuinely save you thousands of pounds! By fixing the exchange rate through a currency specialist – it will also give you peace of mind in knowing exactly how much your property will cost from the outset. Foreign Currency brokers can assist you further by explaining what is happening in the currency market & advise you which type of currency transaction will best meet your needs. Later on, they could save you money on smaller currency transactions such as transferring money to cover living expenses, renovations or property maintenance. If you are renting out your property and transferring the income from a foreign currency into Sterling you can also save money on the conversion & transfer costs.
Please see our PROPERTY SERVICES page for more information on Foreign Currency.