Costs and Taxes When Buying in Ibiza
What the purchase really costs, and what ownership costs each year, set out plainly for US buyers.
Budget realistically for total transaction costs of 10 to 13 percent on top of the purchase price. The main components are these.
- Transfer tax, ITP: payable on resale properties in the Balearics on a sliding scale of roughly 8 to 13 percent, rising with the price.
- New builds: 10 percent IVA, the Spanish VAT, plus about 1.5 percent stamp duty, in place of ITP.
- Notary and land registry: about 1 percent.
- Independent lawyer: about 1 percent plus VAT, and money well spent.
Before you commit to the contrato de arras, your lawyer will prepare a precise costs schedule for the specific property, so there are no surprises at the notary.
What ownership costs each year
Running costs on Ibiza are modest relative to prices, but they deserve a line in the plan.
- IBI: the local property tax, billed annually by the town hall.
- Non-resident income tax: Spain taxes non-resident owners on a notional imputed income even when the property sits empty, and on actual rental income when it is let.
- Community fees: where the property forms part of a community of owners.
- Utilities and insurance: much as at home, with buildings cover arranged locally.
Your lawyer or a local fiscal representative can handle the annual Spanish filings on your behalf.
The IRS side
As a US person, you also have reporting obligations at home. Foreign assets and foreign bank accounts can trigger FBAR and FATCA reporting once certain thresholds are met, and Spain has a double taxation treaty with the United States, so the same income should not be taxed twice when filings are done correctly. We do not give US tax advice, and we recommend every client speak with a US tax adviser before completion. What we do provide is coordination: we connect your US adviser with your Spanish lawyer, and our currency exchange specialists typically achieve materially better USD to EUR rates than a retail bank, which is a real saving at these sums.
Talk it through with an advisor
We work with US-based clients across time zones. Book a call at a time that suits you.