Essential elements for the purchase of a house in Ibiza

Buying a home in Ibiza can be a rewarding investment, offering both a luxurious lifestyle and potential financial benefits. However, navigating the property market in a foreign country requires careful planning and knowledge of local regulations. Here are the key steps to successfully buying a home in Ibiza:

• Do your research and set your budget –Before jumping into the property market, it is essential to do thorough research. Familiarise yourself with the different areas of Ibiza, such as Ibiza Town, Santa Eulalia, San Antonio and the prime locations such as Can Rimbau, Can Furnet and Cap Martinet. Set your budget, taking into account the purchase price, taxes, legal costs and possible renovation costs.
• Hire a local estate agent –Hiring a local estate agent who is familiar with the Ibizan market can be an invaluable help. An experienced agent can give you insight into the best neighbourhoods and property values and guide you through the buying process. They can also help you find properties that are not on the market and not publicly listed.
• Secured financing – If you need a mortgage, it is important that you arrange your finance early. Spanish banks offer non-resident mortgages that usually cover up to 70% of the property value. Make sure you have all the necessary documentation, including proof of income, tax returns and bank statements.

• Legal representation – Hire a local lawyer who specialises in real estate transactions to protect your interests. Your lawyer will conduct due diligence, including checking the legal status of the property, verifying ownership and ensuring that there are no outstanding debts or encumbrances on the property. This is a very important step as many properties have problems or have been built without a licence. There is probably now an amnesty and many illegal extensions can be legalised, but again you need to consult a good lawyer.
• Property inspection – Once you have found a property you are interested in, carry out a thorough inspection. This step is crucial to identify any potential problems or necessary repairs. Bringing in a professional surveyor can provide an accurate assessment of the property’s condition.
• Offer and negotiation – Once you have decided on a property, your agent will help you make an offer. Be prepared to negotiate the price and terms with the seller. Once an agreement has been reached, a reservation contract (Contrato de Reserva) is signed, which is usually accompanied by a deposit (normally 1% of the purchase price) to take the property off the market.

• Preliminary contract – A preliminary contract (Contrato de Arras) is then signed in which both parties agree on the terms of the sale. At this stage, a deposit of around 10% of the purchase price is usually required, which is secured in a notary account while the documents are being checked. If the buyer does not purchase the house for any reason, the buyer loses the deposit. If the owner does not sell for any reason, he must pay double the amount to the buyer. In this contract, the final purchase price, the date of completion and all conditions of the sale are specified.
• Completion of the purchase – On the day of completion, the final deed of sale (Escritura de Compraventa) is signed before a notary. The balance of the purchase price is paid and ownership is transferred. Make sure that all taxes and fees are paid at this time.
• Registration – The final step is to register the property in your name at the Land Registry (Registro de la Propiedad). Your lawyer will usually take care of this process and ensure that the property is legally registered in your name.
• Considerations after the purchase – Once you have purchased the property, consider the ongoing costs, including property tax, maintenance, utilities and any community fees if the property is part of an urbanisation. If you plan to rent out the property, you should also find out about local rental laws and obtain the necessary licences.

Conclusion

Buying a property in Ibiza involves several important steps, from the initial research to the final registration. By following these steps and working with experienced professionals, you can navigate the process smoothly and enjoy the benefits of owning a property in one of the most beautiful and sought-after locations in the Mediterranean.

For further details and expert assistance you should contact us. We are experts who are familiar with the property market in Ibiza and can recommend a lawyer from the island who is familiar with the laws and regulations in Ibiza.