Buying a property in Ibiza or the Balearic Islands requires meeting a series of legal and administrative requirements that ensure the legal security of the transaction. It’s not just about having the necessary financing but also ensuring that all the documents are in order to avoid future problems. At Rodríguez Tur Lawyers, we guide you through every step of the process to ensure that the real estate purchase in Ibiza is carried out safely and without unforeseen issues. Below, we detail the key documents you will need to buy a home in this region.
Basic documents for purchasing a property in Ibiza and the Balearic Islands
The first phase of buying a property is ensuring that the seller has all the documents that prove ownership and the legal status of the property. The essential documents you should request are:
- Title Deed: This document is essential as it certifies who the legal owner of the property is. Before proceeding, you must verify that the seller is truly the owner.
- Simple note from the Land Registry: This report details the legal status of the property, revealing any potential charges or encumbrances that could affect the transaction, such as mortgages, easements, or liens.
- Energy Efficiency Certificate: All homes must have this document, which indicates the energy efficiency level of the property. It is mandatory to formalize the sale.
- Latest IBI (Property Tax) receipt: This receipt proves that the seller is up to date with municipal taxes related to the property.
Documents required from the buyer for the purchase in the Balearic Islands
The buyer must also provide several documents to formalize the transaction. Having everything in order speeds up the process and avoids complications. The main documents include:
- ID or NIE: The buyer must identify themselves with their National Identity Document (DNI) or, if they are a foreigner, with the Foreigner Identification Number (NIE).
- Spanish bank account number: It is essential to have a bank account with a Spanish entity, both for making payments for the purchase and for managing the taxes arising from the transaction.
- Proof of financial solvency: If the buyer is financing the purchase through a mortgage loan, the bank will require proof of financial solvency, such as income statements or financial records.
Having all these documents ready will not only facilitate the process but also ensure that the transaction is carried out with full legal security.
Earnest Money Contract: A Preliminary Step in the Purchase
The earnest money contract is a private agreement between the buyer and seller that secures the reservation of the property while the necessary documents for the final purchase are processed. It is the most important document of all, as it details every aspect of the transaction. There are three types of earnest money contracts: confirmatory, penal, and penitential.
- Confirmatory Earnest Money: Serves as a sign that both parties are committed to the contract. The earnest money is deducted from the total price when the purchase deed is signed.
In case of non-compliance, there is no direct penalty related to the earnest money. If either party breaches, the other can demand contract fulfillment or claim compensation, but the earnest money is not automatically forfeited. - Penitential Earnest Money: Allows either party to withdraw from the contract in exchange for a financial penalty. In case of withdrawal:
- If the seller decides not to sell: They must return double the earnest money to the buyer.
- If the buyer decides not to proceed: They forfeit the earnest money paid.
The earnest money contract sets the terms, while the purchase deed simply formalizes what was agreed upon in this document.
In the earnest money contract, it is agreed that if the buyer backs out without justified cause, they will lose the deposit. If the seller breaches the agreement, they must return double the amount deposited. This contract ensures that both parties meet their commitments and helps avoid conflicts during the purchase process.
Public Purchase Deed: The Key Document
The public purchase deed is the most important document in a real estate transaction, as it formalizes the transfer of the property. This document is signed before a notary and includes all the terms agreed upon by the parties, such as the sale price, the identification of the parties, and a detailed description of the property.
Once the public deed is signed, the property must be registered with the Land Registry, which guarantees that the buyer is the new legal owner of the property. At Rodríguez Tur Lawyers, we assist you throughout the process, from signing to registration, to ensure that the transaction is carried out without legal complications.
What taxes are paid when buying a property in Ibiza and the Balearic Islands?
Purchasing a home in the Balearic Islands involves a series of taxes that must be considered as part of the total cost of the transaction. The most important ones include:
- Transfer Tax (ITP): This applies to the purchase of second-hand homes. In the Balearic Islands, it ranges from 8% to 13%, depending on the value of the property, although there are reductions in certain cases based on age.
- Value Added Tax (VAT): This tax only applies to the purchase of newly constructed homes, being 10% of the sale price.
- Municipal Capital Gains Tax: This tax, usually paid by the seller, taxes the increase in the value of the land during the time the seller has owned the property. The amount depends on the location and the cadastral value of the property.
- Capital Gains Tax: The seller must pay personal income tax (IRPF) on the capital gains, which can range from 19% to 28%, depending on the gain.
Knowing these taxes is essential to avoid surprises at the time of purchase.
What documents must a property in Ibiza have to be up to date?
Before purchasing a property, it is crucial to ensure that all the necessary documents and permits are in order. The main ones are:
- Title Deed: The public deed certifies who the legal owner of the property is. This document is essential for verifying that the property is correctly registered with the Land Registry and that there are no ownership issues.
- Simple Note from the Land Registry: This is a fundamental document that shows the legal status of the property, including charges, mortgages, easements, liens, or other limitations that could affect the value or use of the property. It is important to request an updated simple note before the purchase.
- First Occupancy License: This document confirms that the property complies with urban planning regulations and has been legally constructed according to approved plans. It is especially important for new or refurbished properties.
- Habitability Certificate: This certificate guarantees that the property is suitable for habitation and complies with the minimum living conditions required by law. Without this document, the property cannot be legally sold or rented.
- Energy Certificate: Mandatory in Spain since 2013, this certificate indicates the energy efficiency of the property. It is essential to have it before putting the property up for sale or rent, and it must be issued by a qualified technician.
- Certificate of debts with the homeowners’ association: If the property is part of a community of neighbors, it is necessary to obtain a certificate proving that the current owner is up to date with community fees. This document must be issued by the community administrator.
- IBI (Property Tax) Receipts: The IBI is a municipal tax that all property owners must pay. It is important to request receipts from the past few years to ensure there are no outstanding debts with the local council, as these could transfer to the new owner.
- Certificate of outstanding mortgage debt: If the seller has a mortgage on the property, it is necessary to request a certificate from the bank indicating the outstanding debt. This document verifies whether the mortgage will be canceled at the time of the sale or transferred to the buyer.
- Utility Installation Certificates: It is advisable for the property to have updated certificates for water, electricity, and gas installations (if applicable). These documents ensure that the installations comply with current regulations and are in good working condition.
- Renovation Permits: If renovations have been carried out on the property, it is crucial to have the corresponding permits that certify the work was authorized and executed according to the law. Without these permits, the renovations could be illegal and cause future problems.
Having all these documents in order is crucial to ensure the property transaction is carried out without legal complications. At Rodríguez Tur Lawyers, we handle the review and management of all these aspects, ensuring that your purchase is fully protected. Having a specialized lawyer is essential to verify that everything is in order before finalizing the transaction, thus avoiding future problems that may arise from a lack of documentation or legal irregularities.
Property Purchase Process in Ibiza: Step by Step
The process of buying and selling a property in Ibiza follows a series of steps that should be understood to avoid setbacks. Below, we explain the most important stages:
- Signing the Earnest Money Contract: As mentioned, this contract is essential to secure the commitment of both parties and reserve the property.
- Obtaining financing: If a mortgage is required, this is the time to ensure the financing is approved by the bank.
- Signing the public deed before a notary: This is the step in which the purchase is formalized. After signing, the notary will be responsible for registering the property in the Land Registry.
- Payment of taxes: The buyer must pay the ITP or VAT, as applicable, and other expenses related to the purchase, such as notary fees.
Can you buy a property in Ibiza without being a resident?
Yes, it is possible to buy a property in Ibiza without being a resident of Spain. However, non-residents must meet certain requirements:
- Obtain an NIE (Foreigner Identification Number): This number is essential for carrying out any financial or legal transaction in Spain.
- Open a bank account in Spain: Necessary to make payments associated with the purchase and manage taxes.
- Tax residence certificate: In some cases, this may be required to avoid double taxation in your home country.
At Rodríguez Tur Lawyers, we advise you on every step of the process to help you buy a property in Ibiza without legal complications, even if you do not reside in Spain.
What is the Transfer Tax (ITP) in Ibiza?
The Transfer Tax (ITP) is a tax applied to the purchase of second-hand properties. In Ibiza and the Balearic Islands, this tax is applied on a sliding scale, with tax rates ranging from 8% to 13%, depending on the value of the property.
| Total property value from (euros) | Full quota (euros) | Remaining value up to (euros) | Applicable rate (%) |
| 0 | 0 | 400.000 | 8 |
| 400.000,01 | 32.000 | 200.000 | 9 |
| 600.000,01 | 50.000 | 400.000 | 10 |
| 1.000.000,01 | 90.000 | 2.000.000 | 12 |
| 2.000.000,01 | 210.000 | Onwards | 13 |
This tax is paid upon the completion of the purchase and should be considered within the final budget.
Non-EU citizens and the purchase of properties on rural land
It is important to note that non-EU buyers need a military permit to purchase properties on rural land, a process that can take up to 4 months.
Benefits of having a real estate lawyer in Ibiza
Having a lawyer specialized in real estate is key to ensuring that all stages of the purchase process are handled correctly and without complications. At Rodríguez Tur Lawyers, we offer a complete service that includes document review, representation before a notary, and tax management, avoiding legal or fiscal surprises and guaranteeing peace of mind throughout the process. Buying a property in Ibiza and the Balearic Islands is an important investment that requires meeting legal and tax requirements. At Rodríguez Tur Lawyers, we advise you at every step, from negotiating terms, urban planning Due Diligence, to registration and land registry, ensuring a safe and seamless transaction.
Contact our team of specialized Real Estate Purchase Lawyers in Ibiza and the Balearic Islands for more information.
