Introduction
Budget 10 to 14% on top of the purchase price
Buying property in Ibiza involves much more than the purchase price alone. As a rule of thumb, budget 9 to 10% on top for a mid-market resale home, 13 to 14% for a luxury property above 1 million euros, and 11.8 to 12% for new build. On the selling side, non-residents are taxed at a flat 19% on the gain, while residents pay progressive rates up to 28%. This guide sets out exactly which costs fall when, on whom, and how to work them out correctly.
The most common mistake is applying the highest tax rate to the whole purchase price. ITP in the Balearics is progressive, bracket by bracket, like income tax. You pay 8% on the first €400,000, 9% on the next portion, and so on.
Buyer costs, resale
1. Transfer tax (ITP)
When you buy an existing property from a private seller, you pay ITP (Impuesto sobre Transmisiones Patrimoniales). The Balearic Islands apply a progressive rate, bracket by bracket:
| Purchase price bracket | Rate |
|---|---|
| Up to €400,000 | 8% |
| €400,001 – €600,000 | 9% |
| €600,001 – €1,000,000 | 10% |
| €1,000,001 – €2,000,000 | 12% |
| Above €2,000,000 | 13% |
Worked example: a resale villa of €1,500,000
| Calculation | Amount |
|---|---|
| First €400,000 × 8% | €32,000 |
| Next €200,000 (to €600,000) × 9% | €18,000 |
| Next €400,000 (to €1,000,000) × 10% | €40,000 |
| Remaining €500,000 × 12% | €60,000 |
| Total ITP (effective rate 10%) | €150,000 |
ITP is due within 30 working days of signing the notarial deed, via Modelo 600 with the Balearic tax agency (ATIB).
Buyer costs, new build
2. VAT (IVA) and stamp duty (AJD)
Buying a new build directly from a developer means no ITP. Instead you pay:
| Tax | Rate | Notes |
|---|---|---|
| VAT (IVA) | 10% | Standard residential property |
| VAT (IVA) | 21% | Land and commercial property |
| Stamp duty (AJD) | 1.5% | Standard, on the purchase price |
| Stamp duty (AJD), luxury | 2% | New build above €1,000,000, Balearic-specific |
Worked example: a new-build villa of €1,500,000
| Calculation | Amount |
|---|---|
| VAT (IVA) 10% | €150,000 |
| Stamp duty (AJD) 2% (luxury) | €30,000 |
| Total taxes (12% of the price) | €180,000 |
Other buyer costs
3. Notary, land registry and legal fees
| Cost | Amount | Notes |
|---|---|---|
| Notary fees | €600 – €2,000 | Depends on price and deed complexity |
| Land registry (Registro de la Propiedad) | ~1% of the price | No fixed legal deadline to register, but doing it promptly protects your title; the registry usually processes filings within 15 working days |
| Legal fees (lawyer) | 0.5–1% of the price | Strongly recommended, checks ownership, permits and debts |
| NIE application | €10–€20 | Required for all foreign buyers |
| Appraisal fee (with a mortgage) | €300–€800 | Required by the bank |
Always use a local lawyer. They check whether the property carries any outstanding debts, illegal extensions or permit problems, all of which pass to the new owner at completion.
Annual ownership costs
4. Recurring costs as an owner
| Tax / cost | Rate | Notes |
|---|---|---|
| Property tax (IBI) | 0.3–0.7% of cadastral value | Annual; cadastral value is well below market value |
| Non-resident income tax (IRNR) | 19% (EU) / 24% (non-EU) | Imputed income on 1.1–2% of cadastral value if unrented |
| Waste collection tax | €100–€400/year | Depends on the municipality |
| Community fees (urbanisation) | Varies | Monthly or quarterly, for shared areas and facilities |
| Wealth tax (Patrimonio) | From 0.28% | Balearic regional scale, €3,000,000 general exemption; check with a tax adviser for your situation |
Seller costs
5. What does the seller pay?
Sellers in Ibiza face two main taxes.
- Capital gains tax (IRPF/IRNR). Charged on the profit, that is the sale price minus the purchase price and allowable costs. Non-residents, EU and non-EU alike, pay a flat 19% on the net gain. Spanish tax residents instead pay the progressive IRPF savings scale: 19% up to €6,000, 21% to €50,000, 23% to €200,000, 27% to €300,000, and 28% above. Deductible items include the original purchase price, ITP or VAT paid, notary and legal fees, and documented renovation work, so keep every invoice.
- Plusvalía municipal. A municipal tax on the rise in land value, based on the increase in cadastral land value since the last sale multiplied by the years of ownership. It usually comes to a few thousand euros and is due to the Town Hall within 30 working days of completion.
Three situations are worth flagging for sellers:
- 3% withholding for non-resident sellers. When a non-resident sells, the buyer must withhold 3% of the price and pay it to the Spanish tax agency within one month (Modelo 211), as an advance on capital gains tax. The seller then reclaims any overpayment via Modelo 210. In practice the process runs about four months from completion: the buyer’s one-month window, then three more for the seller to file.
- Primary-residence reinvestment exemption. Spanish residents who sell their main home and reinvest the proceeds in a new main home within two years are exempt from capital gains tax. Non-residents cannot use this.
- Over-65 exemption. Sellers over 65 selling their main residence are fully exempt from capital gains tax.
Agency fees
6. Who pays the estate agent?
In Spain, and on Ibiza in particular, the seller pays the estate agent’s commission. As a buyer you pay nothing to the agent in the vast majority of cases, unless agreed otherwise in writing. Ibiza Now represents both sides professionally and impartially.
Summary
Total cost overview: what to budget
| Situation | Additional budget on top of the purchase price |
|---|---|
| Resale property up to €600,000 | ~9–10% (ITP + notary + lawyer + registry) |
| Resale property €600,000–€1,000,000 | ~10–11% |
| Resale luxury property above €1,000,000 | ~12–14% |
| New build, standard | ~11.8% (10% VAT + 1.5% AJD + fees) |
| New build, luxury above €1,000,000 | ~12–13% (10% VAT + 2% AJD + fees) |
Want a personalised cost estimate for your situation?
Every purchase is different: price, property type, financing and residency status all shape the exact tax burden. We can put you in touch with a local tax specialist who will prepare a detailed breakdown for your specific case.