Buying Property in Ibiza

Buying Property in Ibiza demands caring for properties not complying with planning rules nor possess required permits could be demolished.
Article Last Updated: 19 May, 2024 under Property Purchase

Depending on the person you speak to, you will hear many suggestions on the best places to buy in Spain. Everyone is entitled to an opinion, however Ibiza has a lot to offer - especially for those who are considering renting out the property to holidaymakers, in order to help repayment of a mortgage taken out to finance the purchase,

Buying a house in Ibiza allows the owner to rent the property out during the holiday season to earn some money – and then use the property as a holiday home to enjoy during the off-peak season in this sunny and warm island. 

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If you find a house in Ibiza that you are interested in purchasing, an important first step - and one certainly to take before making any payment – is to check the house’s legal situation. This is critical because there are many properties in Ibiza that have been built illegally or that have been extended illegally at some point. 

Depending on the works carried-out and when they were carried-out, the new owner can receive a fine for those constructions and may even be issued with a demolition order. Alternatively, there are houses in Ibiza that, while they were built illegally, will not give rise to a fine. 

Nonetheless, the new owners will not be permitted to refurbish the house (‘fuera de ordenacion). With its complex topography and more than precious landscapes, buying a House in Ibiza can turn into a financial nightmare: this has happened to quite a few people. 

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Holiday Home Mortgages

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Whether you are buying a holiday home, permanent residence or even a commercial property in Spain, it can be necessary - and even tax efficient - to arrange financing. 

Unfortunately, for many foreign buyers, this can be problematic due to:

  • Dealing with incomprehensible and unending documentation requests,
  • Overcoming issues with not having a local credit history or suffering
  • At the mercy of the banks who know they are dealing with clients who have greater difficulty to ‘shop around’
  • Overcoming the language barrier

This is where our English-speaking mortgage brokers can really make a difference by leveraging established relationships with multiple banks and lenders in Spain to negotiate favourable terms for you and secure competitive interest rates for clients.

The mortgage brokers gather and prepare the necessary documentation, which can be particularly challenging for non-residents unfamiliar with Spain's bureaucratic requirements.

Ultimately, the mortgage brokers goal is to ensure that you get a much better deal, and by reducing the overall cost of repayment of your mortgage substantially, they more than justify their fee. 

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2. Ibiza Properties May Have Irregular Planning Applications

If you are buying property in Ibiza, it is very important to conduct a preliminary inquiry into its legality before making any payment or assuming any obligations. 

On this island there are many properties or extensions to properties that do not comply with the current planning rules and nor do they hold the necessary permits and, consequently, are not legal. 

This affects principally rural properties, many of which were houses built in Ibiza many years ago by their original owners, who failed to apply for official planning permission to construct the properties. 

Furthermore, many such properties are located in areas that are protected and where construction of residential property is prohibited. 

As a result of the foregoing, we would strongly recommend that a prospective purchaser contacts a legal expert to advise on whether the type of building or extension in question may be successfully legalised or not. This will depend - among other things - on the exact location of the property, the size of the construction, build date, whether there are any disciplinary proceedings currently outstanding, from the local authorities, relating to the property - or not.

3. Amnesty

The good news is that we are currently under an amnesty by which it is possible to legalise a construction by payment of a small fine. Failure to take advantage of the amnesty could lead to an inspection for illegal constructions, and an order for demolition of the property may well follow.

 

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Regularisation of Property Service

Who Is This Service For?

Regularisation of Property

Often a property is acquired only to discover that one or a number of elements of the property are legally 'deficient'. Typical examples might be an extension to the property added by a previous owner a or swimming-pool for which appropriate planning permission was never sought.

Normally any such irregularities would be discovered upon legal due-diligence by a conveyancing solicitor. Other types of deficiency range from procedural to technical and may be simple to rectify or rather more complex, depending on the specific problem at hand. 

What Does This Service Consist Of?

  • Initial consultation with an experienced English-speaking architect to determine the gravity of the problem and the best solution
  • Depending on the recommended solution, the architect will make submissions on your behalf to the relevant local authority board or tribunal or may engage a solicitor if required
  • Representation throught the regularisation process, with the new title registered with the appropriate registry
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4. Buying Property in Ibiza: example of fined and demolished property

For example, not too long ago, an international musician was penalised for the construction of an illegal property in St. Antonio. The Court of Palma condemned him to a term of six months in prison and a fine of 10,800 euros as the perpetrator of a crime against land management (delito contra la ordenación del territorio) during the construction of his residence in a rural Ibiza. The house was demolished in 2009 in compliance with a court ruling that declared illegal construction in 2001. 

Therefore, it can be seen that when buying a property in Spain in general - and Ibiza specifically - it is critical to have clear answers regarding the legality of the construction before purchasing a home since a buyer could well have to deal with very high costs in order to legalise the property (assuming that this is even possible ) and could even be exposed to significant financial penalties by the competent authorities. 

Accordingly, it is not advisable to even consider trying to do this by yourself - always ensure that you have an independent lawyer to assist (not one recommended by any party to the conveyance who will receive fees/commission only if the conveyance goes ahead) to assist. 

Of course, Advocate Abroad Ibiza will assist clients who may be concerned regarding the legality of any property that they are interested in acquiring.

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Estate Agency Services
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Estate Agency Services

Who Can Benefit from this Service?

Estate Agency Services

This service is tailored for expats relocating to Spain who want expert assistance in navigating the Spanish property market. 

The real estate market in Spain has evolved a great deal in the last 15 years, because buyers have become more diverse and are no longer simply looking for a sunny retirement home or holiday villa - though these are still the most sought after properties.

As the work-from-home concept has taken root, more and more people from Northern Europe are considering a permanent move to Spain, and its year round sunshine.

So, whether you are looking for a holiday home or a permanent residence, our English-speaking estate agency partners around Spain will help to simplify your transition with their expert knowledge of local market dynamics.

Benefits - Why Choose Our Service

  • Personalized Property Search: Tailored options that match your specific needs, preferences, and budget.
  • Legal and Financial Guidance: Expert advice on Spanish property laws, tax implications, and financial considerations via Advocate Abroad's lawyers
  • Language Support: Overcome language barriers with our multilingual estate agents.
  • Local Market Insight: In-depth knowledge of various Spanish regions, ensuring you find the right location.
  • Assistance with Paperwork: Help with all necessary documentation, from initial offers to final contracts.
  • After-Sale Support: Ongoing assistance with settling in, including utilities setup and local recommendations.
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5. Tourist Licences

It is also important to note that, to be able to rent your property to tourists, you will need to get a special permit (tourist license) which can only be issued if the property is legal. It goes without saying that, should you find yourself in any of the above situations, your dream home in Ibiza could turn into a financial disaster. 

Obviously, it is therefore critical that you have an independent expert evaluate the legal position of any house in Ibiza that you are considering purchasing.Such an expert will advise you on whether the type of building or extension in question may be successfully legalised or not. 

This will depend - among other things - on the exact location of the house, the size of the construction, build date, whether there are any disciplinary proceedings currently outstanding, from the local authorities, relating to a house - or not. 

We recommend reading through the buying property in Spain comprehensive legal guide, you may save lots of money and time.

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