When buying in Ibiza, there are a number of fees and taxes to pay on top of the purchase price. Ibiza belongs to the Balearic Islands, along with Mallorca, Menorca and Formentera, among others. The Balearic Islands, like other autonomous regions in Spain, have their own tax regime for property transactions. This article will explain more about additional taxes and costs in the Balearic Islands.
Registration fees on resale (from 2023)
When buying an existing property, you pay registration fees (ITP.) In de Balearen is er een progressief tarief van 8% tot 13% op de aankoopprijs. Tot 400.000 euro betaalt u 8%, op de tweede schijf tot 600.000 euro 9%, op de derde schijf tot 1.000.000 euro 10% en boven 1.000.000 euro 12%. Tot slot is er de schijf van 13% vanaf 2.000.000 EUR. De schijven worden toegepast op de totale waarde van de woning en daarna wordt de belasting verdeeld over het aantal kopers.
VAT and a stamp duty on new construction
In principle, if you buy a new build, you will not pay registration fees. However, you will be charged a flat rate of 10% VAT. You will also pay a stamp duty for first registration of 1.5% on the purchase price.
If you opt for a split purchase, you will pay registration duties on the usufruct and VAT on the bare ownership.
Notary fees and registration office
Besides taxes, as a buyer you are also required to pay the notary's fees and the registration of your title in the land register. These costs also depend on the purchase price, but are around 2,000 euros.
Note: the notary in Spain does not have the same duties as a notary in Belgium or the Netherlands. He does not do checks on the property.
Know that there is a wealth tax in Spain. If, as a non-resident in Spain, you own a property with a value greater than 700,000 euros, you will pay wealth tax. The rates range between 0.20% and 2.50%.
You can also opt for the Balearic Islands local regime. In that case, you can enjoy a exemption of 3,000,000 euros, with the progressive rates between 0.28% and 3.45%.
Cost of a mortgage
One way to avoid wealth tax is to buy with a mortgage loan.
You can opt for a mortgage with a Spanish bank. To take out a mortgage loan in the Balearic Islands, you will pay an additional 1.2% stamp duty on the amount borrowed.
For higher-end properties, you can also get a international mortgage credit take out. The terms of this form of credit are considerably more favourable than a loan through a Spanish bank. If you would like more information on this, feel free to get in touch.
Buying other costs in Ibiza
Finally, there may be other costs such as water and electricity transfers, bank charges, bank cheque fees, setting up of a company, etc.
Once you own, you will pay annual taxes on the ownership of your property, such as the non-resident tax, council tax (IBI) and the waste tax.
Do you have any questions about buying in Ibiza or the Balearic Islands? Feel free to contact on.
Last update: December 2023