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Taxes are due when purchasing real estate on Ibiza. Previously used property carries a property transfer
tax of 6%, and a new property carries a property transfer tax of 7%, while the notary costs are 1%.
Real estate in Spain is subject to an income tax on the non-financed part, which is by rule of thumb
1000 euros per 125,000 euros value annually. It is a bad habit on Ibiza to not note the full value of a
property in the land register when purchasing property, in order to save purchasing costs. Firstly, this is
illegal, and secondly, this leads to bad news when selling the property. You must pay a so-called Plusvalia Tax
on any profit made when selling the property, which is 30% of the profit. At the latest then, the too-low entry
in the land register will come back to haunt you.
Here are 10 important rules of thumb:
We have listed the 10 most important requirements so that no bad news can befall you when purchasing a house on Ibiza.
- When you purchase a building site, make sure that they have the minimum size for further building.
- When you buy property, demand an immediate, notarized purchase contract and an immediate entry in the land register.
- Many people will give you empty promises, so get everything in writing to show in front of court if necessary, even self-evident things and promises.
- As a buyer, you should demand proof that the seller is the owner by having him show you the original notarized purchase contract or an excerpt of a current land register entry.
- If you don't know what to do, get professional advice or ask an insider. That way, you save the costs of a potential mispurchase.
- Avoid form contracts as much as possible, since they only include advantages for your contract partner. Instead, use contracts that are exactly adapted, which both partners can safely sign.
- It is also important for both contract partners to decide under which law the contract should fall. It is best to agree on this before signing the contract to avoid misunderstandings.
- Do not make any verbal or written contracts without knowing about the building fabric of the object. Ask the following questions:
- Are there liabilities on the object?
- Is the object charged with tax debts, and if yes who is liable for them?
- How should the consistency of the building site be estimated?
- Are there allocation arrears present?
- Is the object subject to a lease or rental contract?
- Are there any current building plans made by the local municipality?
- When making larger financial investments, you should always be concerned first for your own security. It is best if you protect yourself in writing against your contract partner.
- If you are considering an object which has not yet been paid off, then you should demand proof in writing from the seller concerning the payment installments, and also ask whether there is a guarantee or insurance present. Let the municipality inform you about the building fabric and request a certification that the site can be built on, in case of a building site.
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