Buy a property in Ibiza
For us, "customer service" is not just an empty phrase or a phrase, rather all our efforts are aimed solely at ensuring your complete satisfaction, even after the purchase of a property. We also point out that short-term changes in matters of real estate purchase in Ibiza (legal and fiscal) by law to occur or can be made at short notice.
Therefore, we recommend a tax advisor or lawyer of their own choice when buying. If changes occur, we will inform you in time, at the latest at a possible inspection on site.
Buying property on the Balearic Islands
What do you have to consider when buying a property in Ibiza ?
The purchase of a property in Ibiza is to be sketched here briefly and explained. (it lacks any legal basis by constant legal changes)
1. Acquisition of properties in Ibiza
Citizens from member states of the European Union (EU) are not subject to any restrictions when buying property in Ibiza. They generally have the same rights in Spain as natives. If you are registered as owner in the land register, you enjoy absolute protection with regard to ownership as in Germany.
2. Purchase completion
Under Spanish law, there is no formal requirement for the acquisition of real estate. Even oral purchase contracts can be permissible and legally effective.
The rule in Spain, however, is the conclusion of a contrato privado, a private purchase contract.
You should apply for a NIE number (tax number) at the tax office and set up an account on the island where you want to purchase.
Private purchase contract
The buyer obtains ownership by handing over the escritura publica de compraventa, the notarised contract of sale. This public form of contract is a prerequisite for registration in the registro de la propiedad, the land register. With the private written contract all essential regulations concerning the purchase are agreed upon. In particular, it determines the date by which, at the latest, the escritura publica de compraventa is to be drawn up and thus the ownership is to be transferred.
A deposit is required at the same time as the private contract of sale is concluded. Usually 10 - 15% of the purchase price is required.
The time between the conclusion of the private-written contract and the notarial recording is used to obtain financing if necessary.
All our offers are already checked before you visit the property, to make sure that it is free of encumbrances and that there is already a right of first refusal on this property. In order to ensure that you as the legal successor do not have to pay the debts of the previous owner, the presentation of the previous year's proof of the property tax (IBI) and the municipal taxes is required.
Notary appointment and land register
Three days before the notarial recording, the notary public requests an extract from the land register. With the translation of the land register excerpt, the property is blocked for five days. If another notary would also request an extract from the land register for the same property at this time, the register will refuse to accept this request with a corresponding note. At the notary's appointment, both the buyer and the seller must identify themselves. The notary then reads out the prepared deed and notes that the purchase price has either been paid before the escritura is signed or is being paid at that moment. On the same day, the notary sends a notification of the purchase contract to the land registry. He then submits a copy of the escritura for registration in the registro de la propiedad.
3. purchase and subsequent costs
The basic rule is: the buyer pays for everything. Even if the law states that buyer and seller must agree on the costs.
Total acquisition costs:
If you allow for incidental acquisition costs of 10-13% depending on the purchase price, you're usually well off and on the safe side with your calculations.
What taxes are payable on the purchase?
In addition to the plusvalia mentioned above, a further tax is due to the IVA. When purchasing private persons (2nd hand objects) the transmisiones patrimoniales, the so-called value added tax which was increased to 21 % from 1.1.2013 on. If you buy from a private person this value added tax does not apply.
Cost overview (example)
The acquisition costs, based on the notarised purchase price, are made up as follows:
New regulation since 2012 of the land transfer tax rates of 7 - 10.
- Land transfer tax: from 0.00 - 300,000.- Euros 7%
- Land transfer tax: from 300 - 500,000.- Euro 8%
- Land transfer tax: from 500 - 700,000.- Euros 9%
- Land transfer tax: from 700,000.--Euro 10%.
When the general and when the reduced IVA tax rate is due:
- 21 % general IVA on the purchase of undeveloped land
- 10 % reduced IVA for the purchase of apartments or houses (subject to change)
- Example: Purchase of a real estate with a value of 500.000,- Euro.
- First 300.000 Euro with 7%.
- Remaining 200,000 euros with 8%.
- Notary and registration fees 1 to 1,5 %.
The annual follow-up costs, based on the documentary value of the property, are made up as follows (subject to change):
- Wealth tax from 0.2
- Income tax from 1.1 % of the cadastral value
- Property tax 0.4 to 0.95 % (in per mille) (depending on the respective property and the land registry office)
Who pays which taxes and costs?
1. Brokerage fee:
In Spain it is common for the seller to place the order, so that he/she must also pay the corresponding costs (brokerage fees), these are usually between 3 and 6% of the transfer value. Usually it is 5% of the transfer value.
2. Lawyer's fee:
If lawyers are called in for the correct execution of the transfer, each party pays the fees of his own lawyer. If only one of the two lawyers takes care of the preparation of the contracts, the execution, etc., it is usual for uncomplicated transfers that the parties each pay 50% of his fee.
3. Notary fees:
Although article 1.455 of the Civil Code stipulates that these are to be borne by the seller - unless the contract stipulates otherwise - it is common practice in law for the buyer to pay the notary.
4. Land transfer tax:
The property transfer tax set at seven percent or more (see new regulation dated 01.05.2012) is always to be borne by the buyer. The municipal capital gains tax is conflicting: although the law stipulates that it must be paid by the seller, until recently it was common practice in Ibiza to impose this tax on the buyer. However, this has changed recently; at present, this issue must be discussed at every transfer. If the seller does not have his or her first residence in Spain, there is an obligation to pay five percent of the official purchase price to the tax office as a deposit for the profit tax to be paid by the seller. The buyer is obliged to withhold this amount from the purchase price and pay it over to the authorities.
5. Land registry fees:
These are of course to be paid by the buyer, since he is also registered as the new owner in the land register.
6. Stay in Ibiza (The new change from 02.04.07)
Since 02.04.2007 the foreigner card is no longer available. Every EU foreigner who stays or lives in Spain for more than three months in one piece must be registered in the foreigners register. This is only possible in Mallorca at the national police in Palma. Please bring your passport and the completed application form. The processing fee is approx. 6.70 Euro (subject to change) and must be paid into a Spanish bank. For more detailed information we will be happy to talk to you in a personal conversation. Take advantage of our mature international experience and our professional approach. We are looking forward to a successful cooperation.
7. Foreigners Authority in Palma de Mallorca - in this building you will also find the Authority for the Coastal Zone Law
Buy your property in Ibiza with CW Group and feel safe !!!
Interested in buying a property in Ibiza? The CW Group will be at your side.