Buying Property in Ibiza
Spain has long been popular for those looking for a second home in the sun, or indeed for those looking to relocate permanently. The island offers a very favourable climate and wonderfully diverse scenery, and with good links to many European cities, it really does tick all the boxes.
All this is probably why house prices here have weathered the global economic crisis so well. Desirable properties remain popular with foreign buyers regardless of what the Spanish economy is doing.
Start buying property
In Spain there are many options when purchasing your property:
- Through a local Estate Agent
- Property searchers
- Using the services of a Solicitor ('Notario')
- Buying a new build
For those who don’t speak fluent Spanish, the option of using an estate agent is generally preferred. Estate agents are known as Immobiliarias in Spain and they are only lightly regulated by the government so make sure that the agent you work with displays knowledge of the market and works in a professional manner. Most are multi-lingual and they tend to be regionally based ie agents in the south west will only sell properties in the south west. The price of properties that are advertised with an agent generally already include their agency commission fees (usually around 5%). This is important to know when it comes to fees & taxes, as these should be based on the cost of the property only. Note also that a property may be offered by more than one agent and the asking price may vary – this can be a reflection of commission charges or simply that the vendor is trying his luck!
Property searchers will look at properties that are within your price range and match your requirements. Most will offer a personal service, taking you to view the properties they have short-listed. Some property searchers charge a fee while others prefer to take a percentage commission from the Inmobilario instead.
A public official known as a 'Notario'. They are highly qualified in the Spanish legal system and have been given powers by the State to legalise property purchase transactions that cannot be enforced by any other means. their responsibilities include conveyance, preparing the various documents and confirming the seller's title to the property, checking that there are no other mortgages on the property, etc. The notary is responsible for the legality of all documents that are signed before them in their personal capacity, which provides a guarantee for the client.
New build & developments
If you are buying a new build off-plan, you are more likely to deal with the developer themselves rather than the agent (who may only be involved at the introductory stage). It’s worth doing some research on the developer to see what kind of properties they produce, and whether issues & complaints have arisen from previous developments.
The buying process in Ibiza can be a bureaucratic affair and it is strongly recommended that professional advice, in the form of independent property lawyers, is sought. Beware of lawyers recommended by the estate agent as there may be a conflict of interests should a dispute arise between yourself and the agent. Ensure that your lawyer is registered with Bar Association (Colegio de Abogados).
As a foreign property owner in Spain, you will need to obtain a NIE number – this is a ‘foreign identity number’ which is required to pay your property taxes. Your lawyer can apply for one on your behalf or you can contact the Spanish authorities yourself – the process can take anything from two to six weeks. Your lawyer will help you with the contracts, payments, look out for all your interests and register your property for you at the Land Registry. Lawyers typically charge 1.0% to 1.5% of the property price, or you may prefer to negotiate an hourly rate.
It is advisable to explore your mortgage options before you start your property search. This way, you will be under no time pressure to find the best mortgage for your circumstances and this will save you money in the long run.