Dreaming of owning your own luxury pad in the scorching Ibiza sun?
It’s easy to see why so many Brits choose to live on this cosmopolitan Balearic island in Spain, or at least buy holiday homes there. Ibiza offers idyllic beaches and beautiful turquoise seas, along with vibrant nightlife, great food and year-round wonderful weather.
But how easy is buying property in Ibiza as a foreigner, and is it different to buying property in Spain? Read on for a full guide, covering everything from property prices to mortgage info.
Property is selling fast in Ibiza and across the Balearic Islands, thanks to what industry experts believe is pent-up demand following the Covid-19 pandemic¹.
Property prices continue to rise, with the average price per square metre increasing by around 21% between 2019 and 2021².
There’s strong demand for property in Ibiza Town (Eivissa) while buyers searching for luxury second homes are focusing their search on San José².
Foreigners are permitted to buy property in Ibiza, but there are a couple of key things you need to know.
Firstly, you’ll need a Tax Identification Number, known in Spain as a Número de Identificación de Extranjero (NIE). You can apply for this at the Spanish Embassy in the UK, or by visiting the Local Commissioner of Ibiza³.
There’s also another step you should be aware of, which some British buyers have been caught out by recently. Once the UK officially left the EU, a new rule was introduced in Ibiza which required British buyers to secure a military permit for rural and coastal properties on the island¹. You may not need this, but it’s a smart idea to look into it early just in case, as the application process can take a while.
Lastly, you’ll need to check whether you need a visa to live in your new Ibizan property once you’ve bought it.
Like some other countries, Spain offers something called a ‘Golden Visa’⁴. This allows non-EU nationals to buy property in Spain or make another substantial investment, and get a residence permit in return.
You can renew this permit as many times as you want (as long as you maintain your investment). And once you’ve been in Spain at least 10 years, you can apply for citizenship⁴.
If you’re interested in getting a Spanish Golden Visa, you’ll need to make sure the Ibizan property has a value of at least €500,000⁴.
Ibiza tends to be more expensive than the other Balearics³, due to its popularity. But how far will your money go? Let’s run through the approximate cost of buying property in different parts of Ibiza:
|Location||Average price per sq.m in 2021⁵|
|Ibiza Town (Eivissa)||€7,418|
If you’re not living in Ibiza or familiar with the property market, then working with a knowledgeable local real estate agent (inmobiliaria) could be a good idea.
But make sure to vet agents carefully before proceeding, as regulation is relatively low in Spain⁶. Expatica has a directory of real estate agents to help you start your search.
Want to start your property search yourself? Check out these popular Ibiza property portals:
Ibiza has lots of fabulous destinations to choose from, including vibrant tourist hotspots and idyllic rural retreats. Here are some areas to look at to start your search:
- San José - made up of four charming villages in the south of the island, offering spectacular coastal scenery.
- Santa Eulalia - an idyllic family-friendly area popular with tourists, with beautiful beaches, a marina port and a bustling, vibrant atmosphere.
- San Juan - located in the north of the island, an expansive and unspoilt rural area with some of Ibiza’s most picturesque beaches. If you’re looking for a laid-back lifestyle, you’ll love San Juan’s bohemian vibe.
- Eivissa (Ibiza Town) - a World Heritage Site with a beautiful old town, modern developments (including luxury apartments and penthouses) and a choice of popular beaches.
- San Antonio - a popular tourist spot famous for its beaches, nightlife and spectacular sunsets, along with Michelin star dining experiences.
Unless you’re already on the island, you’ll need to plan a few trips out there to view properties and check out the local area. The type of property you go for will depend on your budget, and whether you’d like luxury extras like a private pool. Villas are a popular choice in Ibiza, but they don’t always come cheap.
To make sure the property you’re buying is in sound condition, you can opt to have a house survey carried out. It is possible to buy without a survey⁶, but it could help you avoid nasty surprises later on.
If you’re buying a rural home, a crucial thing to check for are illegal additions - which is known to happen with properties in Ibiza¹. These are features such as porches, pools and garages that may not have received the required permits. Make sure you have your solicitor check everything out thoroughly, or you could face extra costs or even fines from the local authority.
- Start searching properties in Ibiza, and plan a few trips to the island for viewings
- Once you’ve found your perfect property, make an offer. Negotiate the price and the terms and conditions of the sale.
- Appoint a solicitor
- A preliminary sales contract (Contrato Privado de Compraventa) is drawn up and signed
- Pay the holding deposit (usually around 10%) to reserve the property
- Apply for your NIE tax number - you’ll need this to complete the purchase
- Once you have your NIE, you can open a Spanish bank account
- Set a completion date, sign the sales contract and pay the balance of the purchase price, along with all fees and taxes.
- Get the keys to your new home in Ibiza.
The legal requirements in Ibiza are just the same as buying property elsewhere in Spain. It’s mandatory to use a notary³, and it’s absolutely crucial to hire a qualified and independent property lawyer to carry out all the essential paperwork, checks and legal processes³.
If you’re planning to buy a property to rent out, you’ll also need to get a Tourist Rental Licence, known locally as an Estancia Turística y Viviendas (ETV)³.
And don’t forget about the law requiring British (non-EU) buyers to apply for military permission before buying rural/coastal properties.
It is possible to get a mortgage from a Spanish bank for your Ibizan property purchase, even if you aren’t a resident⁶. Some banks even offer specific deals just for expats.
However, as a foreign buyer, you can expect to get a lower loan-to-value (LTV) rate than a Spanish resident. Banks will typically lend up to 60-70% of the purchase price⁶, meaning you’ll need a larger deposit.
Here’s a quick look at the costs typically involved in buying property in Ibiza:³
- Transfer Tax (Impuesto de Transmisiones Patrimoniales, ITP) - 8-11%, depending on the value of the property. This is for second-hand property, not new homes.
- VAT (Impuesto sobre el Valor Añadido, IVA) - 10%, plus stamp duty of 1.2%. This is for new builds, instead of ITP.
- Bank valuation fee (if applicable) - around €500
- Solicitor fees - around 1% of the purchase price
- Notary fees - up to 1%.
The good news though is that the seller usually pays estate agent fees in Ibiza³.
If you’re buying your property in Ibiza while still in the UK, you’ll need a safe, reliable and cost-effective way to transfer money. After all, you’ll have deposits, taxes and legal fees to pay.
Use your bank to send money internationally and you could be stung by high fees and poor exchange rates.
Luckily, there’s a better way. Open a Wise multi-currency account and you can send money from the UK to Ibiza for low fees and the mid-market exchange rate. All things considered, it could work out significantly cheaper than your bank.
Sending money overseas with Wise is fast and fully secure, which is just what you need when making such a large and important purchase.
Sources used for this article:
- FT - demand for Ibiza homes
- Ibiza Prestige - 2021 annual Ibiza property market report
- Privalgo - buying property in Ibiza
- Schengen Visa Info - Spain Golden Visa
- Ibiza Prestige - 2021 annual Ibiza property market report and 2022 forecast
- Expatica - Spanish property
- Villa Contact - Ibiza buyers guide
Sources checked on 22-04-2022.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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