Before buying a property in Ibiza, it is important that you take into consideration a number of legal aspects. Our team of real estate legal advisors are happy to share them with you.
Guide to buying a property in Ibiza | Everything you need to know
Buying a house in Ibiza is a big decision, but it is also an exciting time when you want everything to go smoothly. Regardless of whether it is a first home, a second home for holidays or an investment to rent out.
Be clear about what you are looking for
First of all, it is important that you are clear about the type of property you are looking for, so that you can take the long shot. Keep in mind that the best opportunities fly fast. You may see a house today and it may be sold tomorrow, so you need to be clear about what you want and be quick.
Our advice is that first of all you should make a list of what you want; what you consider essential and optional. This will make it easier for you. You can also determine what your maximum budget is, so that it will be easier for you to filter properties and find your best option.
Try to negotiate a good price and the possibility of a deposit contract
Next, try to negotiate a good price. Nowadays the market is booming and everything sells at any price, but whatever you can negotiate is what you save. You may even be able to pay taxes or insurance, so it’s always good to play with some margin.
If you can’t get anything down, you can always go for another property. If you decide to go ahead, you should know that in most sales transactions a private contract, known as a “contrato de arras”, is used to formalise the agreement between the buyer and seller.
The earnest money contract sets out the terms of the sale and is usually negotiated by the parties. Normally, the seller agrees to sell and in return the buyer makes a deposit of 5-10% of the agreed price when signing the contract. Another symbolic amount may also be fixed. In addition, a deadline is set for the completion of the transaction, which is usually 3 months.
Due diligence of the property must be carried out prior to signing the contract to ensure that the property complies with all legal requirements and that there are no hidden problems. Normally, the nota simple is requested in order to check that the property is free of debts and that everything is up to date.
During the process of the earnest money contract, as a buyer you must bear in mind that you can no longer back out. If you do, you will lose the money paid in advance. That is why it is important to check everything beforehand, in order to.
Before signing, make sure everything is in order
If everything goes ahead, the next step is the signing of the deeds before a notary. The notary is the legal figure who officially validates the contracts and purchase agreements. During this phase, the notary will ensure that all clauses of the contract are understood and accepted by the parties before proceeding further.
Before the final signing of the contract, a thorough verification of the property must also be carried out. Properties in Ibiza often have their years and during that time they may have been built and modified under different regulations. This can lead to missing documents or inaccuracies in the land registry. These things can happen.
To avoid problems we recommend a check at the Land Registry, to obtain information about the owner of the property and possible mortgage encumbrances. As well as verifying the cadastral information, which is useful to delimit the location and boundaries of the property.
In addition, it is advisable to check the building licence, especially for relatively new properties. Another important aspect is the cédula de habitabilidad, which should be checked to ensure that it complies with current legislation. Remember that the lack of a cédula can make it difficult to obtain a mortgage or to apply for a tourist licence.
Considers the total costs of the procedure
Finally, you must take into account the costs and taxes associated with buying a property in Ibiza, such as VAT or ITP (also AJD in the case of new properties). In addition to the lawyer’s legal fees, notary fees and land registry fees.
Generally, the down payment you need for a property is 30%; 20% for the bank in the case of a mortgage and 10% for taxes and other expenses.
If you want to buy a property in Ibiza, do not hesitate to take into account all these aspects that we have mentioned in order to make a great deal.
Remember that it is always advisable to do it with the help of a real estate legal advisor. Do you have any doubts? We can help you.