The real costs of buying a property in Ibiza
In a previous post we spoke about the steps involved to buy a house in Ibiza. This time we will look at the real costs related to buying a property in Ibiza.
When you buy a property in Ibiza, you need to consider that to the property price you need to add several costs and taxes. We can say that the final cost for purchasing a property in Ibiza is between 9% and 12% of the property’s purchase price, including taxes and obligatory additional charges. These costs are broken down as follows:
1. TAXES ON PROPERTY TRANSFERS
When you buy a property in Ibiza, there is a state tax you must pay. The amaound depends whether you buy a new build property or an existing one. If you buy a second-hand property you must pay the Impuesto sobre Transmisiones Patrimoniales (ITP, starting at 8%), when buying a new build property in Ibiza then you must pay the Impuesto sobre el Valor Añadido (IVA, starting at 10%). In both cases, it’s you, the buyer, who must pay the tax on property transfers, calculated according to the total value of the property being sold.
2. LOCAL PROPERTY TAX (IBI = IMPUESTO SOBRE BIENES INMUEBLES)
Similar to the council tax in the UK, this local tax is decided by the Town Hall (Ayuntamiento) where the property is registered. The tax base is calculated with reference to the Catastral value of the property (Valor Catastral). The tax rate depends on the size of the municipality where the property is located. The total amount charged is the property catastral value multiplied by the tax rate. If you buy a property in Ibiza, you will have to pay this tax only once the property has been register to your name.
3. ADDITIONAL COSTS
When buying a property in Ibiza you will incur in many other external costs. These expenses will include agency and legal fees, notary expenses, the property registration, mortgage fees & banking costs (To pay for your property in Ibiza, you will usually be required to present a bankers’ cheque. In order to do this, you will need to set up a Spanish bank account and transfer the funds across from your home country bank account).
For more information on how we can help during the buying process, visit our Services Page.
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