Buying Property in Ibiza in 2024? Best locations and legal issues to avoid

Author: Daniel M.

Profession: Lawyer

Daniel Raso, a seasoned lawyer in Spain, specializes in real estate law. With over 30 years of experience, he provides expert guidance on property transactions, ensuring legal security and smooth processes for buyers and sellers.

View Daniel's full Bio

Author: Daniel M.

Daniel Raso, a seasoned lawyer in Spain, specializes in real estate law. With over 30 years of experience, he provides expert guidance on property transactions, ensuring legal security and smooth processes for buyers and sellers.

Speaks languages:

View Daniel's full Bio

As an English-speaking lawyer in Spain, I’ve seen countless dreams of owning a slice of this Mediterranean paradise—and I’ve also witnessed how quickly those dreams can turn into nightmares without proper legal guidance. Let me take you through the essentials of buying property in Ibiza, from legal pitfalls to hidden gems.

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. Consulting a real estate agent is crucial in this process to ensure you make the best decision and navigate the market effectively.

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.

The tax rates for properties in Ibiza are based on the declared sale price. For example, residential properties, land, commercial premises, and garages/storage rooms all have different tax rates depending on their declared sale price.

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. 

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. One of the notable phases in the property buying process in Spain is the private contract and deposit payment.

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.

The government is currently (early 2024) putting the finishing touches on an amnesty for illegal houses built on rural land. This move aims to bring to light all those properties constructed without permits that, as of now, can’t be demolished. The solution? Legalization, but at a price.

Key Points

• Fine for Legalization: Property owners will need to pay a fine, estimated between 15% to 25% of the purchase price.
• The amnesty will apply to houses built before a certain date (built at least 8 years ago)
• Owners will need to pay fines and ensure their properties meet current building standards.
• Beyond Houses: The amnesty may extend to illegal swimming pools, porches, and extensions.
• Inspired by Past Measures: This initiative draws inspiration from a similar measure implemented during José Ramón Bauzá's tenure.

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. 

Buyers should also allocate about 1% of the purchase value for legal fees and seek specialist advice from a lawyer for wealth tax matters.

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.

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. Property registry fees are one of the purchase costs that the buyer needs to pay, typically amounting to around 1% of the purchase price. 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. 

• Hire an Independent Lawyer: And I don't just say this because I am one. An independent lawyer (not one recommended by the seller or agent) is crucial for navigating Ibiza's complex property laws.
• Conduct a Thorough Legal Check: Before making any payments or commitments, ensure your lawyer investigates the property's legal status, including all constructions and extensions.
• Check for Ongoing Proceedings: Your lawyer should verify if there are any ongoing disciplinary actions or fines associated with the property.
• Consider Location Carefully: Each area of Ibiza has its own charm—and its own set of regulations. From the bustling San Antonio to the exclusive Talamanca, make sure you understand the local context.
• Think Long-Term: Consider your plans for the property. Will you need that tourist licence? Are you planning renovations? 

These factors should guide your purchase decision.

Now we turn to specific areas in Ibiza that can be especially interesting to expats considering relocating to Ibiza:

Cala Jondal, located on Ibiza’s southern coast, is renowned for its upmarket beach scene and crystalline waters. This chic area attracts a sophisticated crowd, including celebrities and jet-setters, making it one of the island’s most exclusive destinations. 

Cala Jondal offers a perfect blend of natural beauty and luxurious amenities, ideal for those seeking a high-end Ibizan experience. It is important to work with knowledgeable and trustworthy real estate agents when buying property in exclusive areas like Cala Jondal.

The beach itself is a picturesque pebble and sand cove, surrounded by pine-clad hills and dotted with some of Ibiza’s most famous beach clubs. These establishments offer gourmet dining, stylish lounging areas, and a vibrant yet refined atmosphere. 

Despite its popularity, Cala Jondal maintains an air of exclusivity and never feels overcrowded. The area is primarily residential, with luxury villas nestled in the surrounding hills, offering privacy and spectacular views.

Cala Jondal Pros & Cons

• Exclusive and upmarket atmosphere.
• Beautiful beach with crystal-clear waters.
• Home to some of Ibiza's most famous beach clubs.
• High-end pricing for properties and local services.
• Can be busier during peak season.
• Limited public transport options.

Eivissa, or Ibiza Town, is the bustling heart of Ibiza, offering a vibrant mix of nightlife, historical sites, and a cosmopolitan lifestyle. It’s known for its lively atmosphere, with something to offer for everyone from party-goers to culture enthusiasts. 

Eivissa boasts a rich cultural heritage with UNESCO World Heritage sites such as Dalt Vila, the ancient fortified town. The rise in property prices and the demand for different types of properties in the real estate market in Eivissa reflect its growing popularity.

The area comes alive at night with world-famous nightclubs, bars, and restaurants. During the day, residents and visitors enjoy exploring narrow streets filled with boutique shops and cafes. The town also features stunning beaches like Talamanca, perfect for relaxation and water activities.

Ibiza Pros & Cons

• Rich cultural heritage and historical sites.
• Vibrant nightlife and dining options.
• Excellent amenities and services.
• Higher property prices.
• Crowded and busy during peak tourist season.
• Noisy environment, especially at night.

Es Cubells, perched on Ibiza’s southwestern coast, is a hidden gem known for its unspoiled beauty and tranquil atmosphere. This small, picturesque village offers a genuine slice of traditional Ibizan life, attracting those seeking privacy, authenticity, and breathtaking sea views. 

Popular among discerning residents and visitors, Es Cubells is an ideal location for those who value exclusivity and natural beauty. The high purchase price of properties in exclusive areas like Es Cubells reflects the premium associated with such desirable locations.

The area is characterized by its dramatic clifftop setting, providing panoramic vistas of the Mediterranean. Es Cubells maintains a low-key charm with its whitewashed church, a few local restaurants, and secluded coves accessible via winding paths. 

The surrounding countryside is dotted with luxury villas, many offering stunning sea views. While quiet, the area is still within reach of Ibiza Town and the airport, making it a convenient yet secluded retreat.

Es Cubells Pros & Cons

• Stunning sea views and unspoiled natural beauty.
• Exclusive and tranquil atmosphere.
• Authentic Ibizan village experience.
• Limited local amenities and nightlife.
• Steep terrain may not suit all.
• Higher-end property prices.

Santa Eulària des Riu, on Ibiza’s eastern coast, offers a serene, family-friendly lifestyle, ideal for those seeking tranquility. Known for its relaxed atmosphere, it features sandy beaches, a charming town center, and a picturesque marina. 

The area is popular among families, couples, and retirees. Consulting a real estate agent is crucial when buying property in family-friendly areas like Santa Eulària des Riu.

Santa Eulària des Riu boasts a peaceful vibe with a blend of traditional charm and modern amenities. The town is a cultural hub, hosting events like traditional dances, music festivals, and art exhibitions. 

Outdoor enthusiasts enjoy hiking, cycling, and water sports. The local dining scene offers diverse options, from traditional Spanish tapas to international cuisine.

Santa Eulària Pros & Cons

• Peaceful and relaxed atmosphere.
• Beautiful beaches.
• Good amenities and family-friendly environment.
• Quieter nightlife.
• Seasonal quietness.
• Limited public transport compared to busier areas.

San Antonio, situated on Ibiza’s western coast, is a vibrant and energetic town known for its world-famous sunset strip and lively nightlife. This dynamic area attracts a diverse crowd, from young party-goers to families seeking a mix of excitement and Mediterranean charm. 

San Antonio offers a perfect blend of beautiful beaches, water sports, and pulsating entertainment. Working with knowledgeable and trustworthy real estate agents is crucial when buying property in vibrant areas like San Antonio.

The town center bustles with activity, featuring a wide array of bars, restaurants, and shops catering to various tastes and budgets. San Antonio’s iconic Sunset Strip is home to legendary bars and cafes where visitors gather to watch spectacular sunsets. 

Despite its reputation for nightlife, the area also offers family-friendly attractions, including nearby beaches, water parks, and boat excursions. The recently revamped promenade provides a pleasant environment for strolling and cycling along the coastline.

San Antonio Pros & Cons

• Vibrant nightlife and entertainment options.
• Beautiful beaches and famous sunset views.
• Good transport links to other parts of the island.
• Can be very busy and noisy during peak season.
• May not suit those seeking a quiet, traditional Ibizan experience.
• Some areas may require renovation or updating.

Talamanca, nestled on Ibiza’s southeastern coast, offers a tranquil escape just minutes from the vibrant Ibiza Town. This upmarket area is perfect for those seeking a balance between serenity and proximity to urban amenities. Known for its stunning crescent-shaped beach and crystal-clear waters, Talamanca attracts a diverse mix of residents, from young professionals to families and retirees. 

When buying property in such upmarket areas, it is crucial to work with a reputable real estate agency to ensure trust and professionalism.

The area boasts a sophisticated ambiance with a blend of modern luxury and Mediterranean charm. Talamanca’s promenade is lined with fashionable restaurants, cafes, and beach clubs, offering a taste of Ibiza’s renowned lifestyle. 

While quieter than Ibiza Town, it still provides easy access to the island’s famous nightlife and cultural attractions. Water sports enthusiasts can enjoy activities like paddleboarding and kayaking, while nature lovers can explore nearby walking trails.

Talamanca Pros & Cons

• Stunning beach and beautiful coastal scenery.
• Upmarket and peaceful residential area.
• Close proximity to Ibiza Town and its amenities.
• Higher property prices compared to some other areas.
• Can be busy during peak tourist season.
• Limited local shopping options compared to larger towns.

If you are serious about relocating to Ibiza, you should be aware of the standard costs of everyday staples that you will need to finance while living here.

Generally speaking, as much as Ibiza is renowned for its vibrant lifestyle and beautiful scenery, this is reflected in its cost of living. Also important to bear in mind is that islands tend to be more expensive than mainland equivalents due to the need to transport all goods to the island. Additionally, the high purchase price of properties in Ibiza significantly affects the overall cost of living.

Below is an overview of the cost of living in Ibiza, covering key aspects like housing, utilities, food, transportation, and entertainment.

Housing

Housing costs in Ibiza can be high, particularly in popular areas. Renting a one-bedroom apartment in the city center of Ibiza can range from €1,800 to €2,000 per month, while outside the city center, prices can be between €900 and €1,800. For those looking to buy, the average price per square meter in the city center is around €5,000, while outside the center, it can range from €3,500.

Utilities

Monthly utility costs, including electricity, heating, cooling, water, and garbage collection, for an 85m2 apartment, average around €217. Internet services add another €55 per month.

Food and Dining

Groceries for one person can cost around €200 to €300 per month. Eating out varies widely, with a meal at an inexpensive restaurant costing about €14, and a three-course meal for two at a mid-range restaurant costing around €85. Basic groceries such as milk (€1.20/liter), bread (€3.00), and eggs (€3.00/12) are moderately priced.

Transportation

Public transportation is affordable, with a one-way ticket costing about €2. A taxi ride starts at €3.83, with an additional €1.21 per kilometer. Owning a car involves additional costs such as insurance and maintenance, which can be significant.

Healthcare

Ibiza offers high-quality healthcare services. Public healthcare is accessible, but many expatriates opt for private health insurance, which can cost between €50 and €150 per month depending on the coverage.

Education

Public schools are free, but private and international schools can cost between €6,000 and €15,000 per year. The quality of education in these institutions is generally high.

Entertainment and Leisure

Ibiza has numerous entertainment options. Gym memberships cost around €75 per month, and cinema tickets are about €8.50 each. Dining out and enjoying the island's nightlife can vary significantly in cost but are generally more affordable than in major European cities.

Although Ibiza does not find itself on this list, due to its size and population, it will be comparable to Palma de Mallorca.

Can foreigners buy property in Ibiza?

Yes, foreigners can buy property in Ibiza without any restrictions. The process is straightforward and similar to that for Spanish citizens. Foreign buyers need a Spanish NIE (Número de Identificación de Extranjero) number, which is an identification number for foreigners. Additionally, opening a Spanish bank account is highly recommended to manage property-related transactions. If financing is required, foreign buyers can apply for a mortgage with Spanish banks, which typically require proof of income and bank statements. Certain procedures may also require a visit to the Spanish Embassy.

Why is property so expensive in Ibiza?

Property in Ibiza is expensive due to several key factors. Firstly, Ibiza's popularity as a premier tourist destination creates high demand for real estate. The island's limited land availability further drives up prices, as there is a finite amount of space for new developments. Additionally, Ibiza's attractive climate, beautiful beaches, and vibrant nightlife make it a desirable location for both vacation homes and permanent residences. The influx of international buyers and celebrities also contributes to the competitive market, increasing property values. Lastly, strict building regulations help preserve the island's natural beauty but limit the supply of new properties, maintaining high prices.

How much is property tax in Ibiza?

Property tax in Ibiza, known as Impuesto sobre Bienes Inmuebles (IBI), varies depending on the municipality and the property's cadastral value. Typically, the IBI rate ranges from 0.4% to 1.1% of the property's cadastral value. In addition to IBI, property owners may also be subject to other taxes such as the annual wealth tax and non-resident income tax, if applicable. It's important to check with local authorities for precise rates and any additional tax obligations specific to your property.