Costs and taxes when buying property in Ibiza.
The cost and taxes on top of the purchase price in Ibiza are about 12%. Please see below how these cost and taxes are presented:
I.Taxes on property transfers (ITP)– Impuesto sobre Transmisiones Patrimoniales
When you buy a resale / used property from a private person in Ibiza, you pay ITP tax, starting at 8% – 11%. These taxes are state taxes and they are collected by the Autonomous Community, the Balearic Islands. The taxes are calculated according to the total value of the property being sold.
ITP is similar to UK Stamp Duty and only applied to the purchase of resale / used properties
Up to €400.000 8%
Over €400.000 till €600.000 9%
Over €600.000 till €1.000.000 10%
Over €1.000.000 11%
II.Taxes on property transfers VAT (IVA)– Impuesto sobre el Valor Añadido
When you buy a new build house /villa/ apartment from a developer in Ibiza you pay VAT (IVA, Impuesto sobre el Valor Añadido) and Stamp Duty (AJD, Actos Juridicos Documentados). The IVA is (Valued Added Tax) VAT.
At present, the VAT is 10% on the purchase price of residential properties( apartments, houses, villa’s, etc). The Stamp Duty is 1,2% of the purchase price. On commercial properties, plots and land the tax rate is 21% VAT, except when the plot/land has a building authorization then it would be 10% VAT.
III. Local taxes (IBI) – Impuesto sobre Bienes Inmuebles
IBI tax is determined by the value calculated by the town hall. This tax has to be paid every year by the owners of the property. The value cadastral is normally much lower than the real market value of the property. Once the property is registered on the new owner(s) name, the tax is payable.
IIII. Other costs
Mortgage costs in Ibiza
If you are planning to buy your property using a mortgage, you will have additional cost and a stamp duty tax (1,2%). There is the cost for making the property valuation ( approx. 500 Euro) plus the cost of the mortgage itself. The maximum loan for lenders who are non-tax paying residents of Spain is normally to 60%-70% with a Spanish bank.
Lawyer fees in Ibiza
Lawyer fees are usually between 1% of the purchase price and it’s always advisable for the buyer to use a lawyer for the due diligence. We always advise using a lawyer established in Ibiza to buy property in Ibiza.
Notary cost in Ibiza
These costs are always paid by the buyer and are usually not more than 2000 euro maximum.
Property registration cost in Ibiza
Cost related to the owner’s registration and the land registration need to be paid by the buyer and are calculated in relation to the purchase price, normally it is around 1%. The time for registration must be within two months after signing the Public Deed.
Community fees in Ibiza
When purchasing a house in a secured urbanization or an apartment in a community. Then monthly or every three months fees have to pay according to the expenses of the maintenance of the community.
Agency fees in Ibiza
The fees of the agency are paid by the seller unless otherwise agreed. In Spain / Ibiza, it is accustomed that there is real estate agent involved between the seller and buyer. Just like a good referee from a soccer match the real estate agency has to take care of the interest of both parties.