Taxes and Costs when buying a property

The cost and taxes on top of the purchase price in Ibiza are about 12%. Please see below what they consist of: 

1.Taxes on property transfers (ITP)

When you buy a resale or 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 of the Balearic Islands. The taxes are calculated according to the total value of the property being sold.

2.Taxes on property transfers VAT (IVA)

When you buy a new build house, villa or apartment from a developer in Ibiza you pay VAT (IVA) and Stamp Duty (AJD, Actos Juridicos Documentados). 
At present, the VAT is 10% on the purchase price of residential properties (apartments, houses, villas…). 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 or land has a building authorization then it would be 10% VAT.

3. Local taxes (IBI) 

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 (between 300 - 500 euros). 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.

4. Other costs

Mortgage costs 

If you are planning to buy your property using a mortgage, you will have an additional cost and a stamp duty tax (1,2%). There is the cost for making the appraisal property valuation 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.

In case of hiring a lawyer

Lawyer fees are usually around 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.

Notary cost 

These costs are always paid by the buyer and are usually not more than 2.000 euros.

Property registration cost 

Cost related to the owner’s registration and the land registration needs 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 

When purchasing a house in 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.