When you buy property on Ibiza (Balearic Islands), you should consider a total cost buyer that varies between 12% and 15% on top of the purchase price. These costs mainly consist of transfer tax (ITP) or VAT (IVA), stamp duty (AJD), notary fees and registration fees. As the Balearic Islands are an autonomous region with its own tax regime, rates here differ from mainland Spain.
Transfer tax (ITP) on existing properties in the Balearic Islands
When buying an existing property in Ibiza, you pay the Impuesto sobre Transmisiones Patrimoniales (ITP). Since 2023, the Balearic Islands government has applied a progressive rate that increases as the purchase price increases.
The tax burden is calculated by bracket as follows:
| Disc (Purchase price) | Tax rate |
| Up to €400,000.00 | 8% |
| From €400,000.01 to €600,000.00 | 9% |
| From €600,000.01 to €1,000,000.00 | 10% |
| From €1,000,000.01 to €2,000,000.00 | 12% |
| Above €2,000,000.01 | 13% |
Calculation example: For a €4,100,000 villa in Ibiza, the total ITP is around € 482.980. This equates to an average effective rate of 11,78%.
"Progressive scales in the Balearic Islands are among the highest in Spain, making thorough tax planning in advance essential for high-end investments," said experts in Spanish real estate law.
VAT (IVA) and Stamp duty (AJD) on new buildings
For new-build properties in Ibiza, you do not pay registration fees (ITP), but you are 10% VAT (IVA) payable on the purchase price. In addition, the local government levies a Stamp duty (Actos Jurídicos Documentados - AJD) from 1,5% for the first registration of the property title.
Note: If you opt for a split purchase (usufruct for the parents, bare ownership for the children), specific rules apply whereby ITP is paid on the usufruct and VAT on the bare ownership. Read more about the split purchase.
Notary fees and the Property Register (Registro de la Propiedad)
In addition to taxes, you need to take into account notary fees and costs for registration in the land register. Although these costs depend on complexity and price, they are usually around € 2.000.
It is crucial to understand that a Spanish notary has a different role than in Belgium or the Netherlands. The notary does not conduct extensive due diligence out on the property (such as building permits or debts). An independent lawyer is therefore indispensable for a secure transaction.
Wealth tax in Ibiza (Patrimonio)
Spain levies a wealth tax on global assets for residents and on Spanish assets for non-residents.
- National scheme: Exemption up to €700,000 per person (rates 0.20% - 2.50%).
- Balearic Islands regional regime (from 2024): There is a generous exemption up to €3,000,000 introduced. Amounts above that will be taxed at progressive rates between 0.28% and 3.45%.
Read more about wealth tax in Spain
Financing and Mortgage Costs
Taking out a mortgage can be a strategic choice to optimise capital gains tax.
- Spanish banks: You will pay approximately 1.2% stamp duty (AJD) on the mortgage amount.
- International mortgages: For higher-end properties, international banks often offer more favourable terms and lower additional costs.
Read more about the cost of a mortgage in Spain.
Annual cost after purchase
Once owned in Ibiza, you are subject to the following annual taxes:
- IBI (Impuesto sobre Bienes Inmuebles): Local council tax.
- Non-residency tax (IRNR): A flat income tax for owners who do not rent out their property.
- Waste tax (Basura): Annual fee for local services.
Frequently asked questions about buying property in Ibiza (FAQ)
How much is the total cost of acquisition (C.K.) in Ibiza?
On average, you should expect 12% to 15% on top of the purchase price. This covers transfer tax (8%-13%) or VAT (10% + 1.5% stamp duty), plus notary fees, registration fees and legal guidance.
Has wealth tax been abolished in the Balearic Islands?
Not completely, but the exemption has been significantly increased to €3,000,000 per person under the regional regime for 2024. This makes Ibiza more fiscally attractive for high-net-worth buyers compared to previous years.
What is the difference between ITP and IVA at the time of purchase?
ITP (registration duty) is applicable to existing properties (resale) and varies by tranche. IVA (VAT) is a flat rate of 10% that only applies to new construction projects bought directly from a promoter.
Do I need a lawyer if a notary is already involved?
Yes. In Spain, the notary only checks that the documents meet the legal formal requirements at the time of signing. A lawyer or jurist carries out the necessary investigation into the urban planning condition, any debts and title before you pay the deposit. Read more about the notary in Spain.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs to safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
