Buying Property in Ibiza

3 Pitfalls to avoid when Building or Buying Property in Ibiza

You have made the decision, you love the white island so much that you would like to buy property on Ibiza. It’s not easy or risk-free at all to find a piece of land to build your dream house or to invest your money into. If it was, everyone would be doing it. So caution! Many will claim that you could easily rent out your newly obtained property during summer so you are reaching into your pockets even a bit deeper.

It might that you have not been informed well about the pitfalls of which one is the rental license. When renting out your holiday home for tourist purposes you need an ETV (Estancia Turistica y Viviendas) Tourist License. In order to get this rental license, you would need to have a property which is completely legally built. If not, you would risk having to tare parts of your property down. Important parts such as that gorgeous swimming pool for instance.
Next to the many advantages that buying or building a villa does have, it is always smart to be informed about the many pitfalls. We explain some of them and are of course open to any of the follow-up or additional questions you may have regarding buying a property in Ibiza.

For which purpose are you building/buying a property on Ibiza?

Think before you buy or build. There are several reasons for a client to buy a property on Ibiza; People buy property on Ibiza for Investment purposes, to enjoy a second home or to take advantage of a combination of both.
When obtaining property in Ibiza for investment purposes it is very important that the property is 100% legal in order to get the above mentioned ETV Tourist Rental License. Yes, everyone rents out apartments and non-licensed villa, but believe me, also in Spain law is being enforced a bit more every year. Why have the stress when you can avoid it from the start?

For investment purposes you are looking to earn the highest return on investment (ROI) as possible. For a good ROI, building is the best way to go, but please do note that in Ibiza, of course depending on location and classification of the land, it could in the worst case even take up to 2,5 years to get a building license. Make sure to work with a good architect so you know exactly what you are facing when wanting to build a property. The architect has good connections with the Townhall-architect and has access to registers to get you all information needed to create a transparent picture of what is possible and how long it will take you to start building and even to finalize a building project.

Hire a good lawyer to investigate your case

Our most important word of advice would be to always get a good lawyer to investigate all documents. The lawyer will firstly secure the property in order to create some time for a good research. In Spain a research takes time. A lawyer in Spain will charge you 1 – 2 % of the sales price and will get you a proper due diligence report on which you can depend. We can advise you on our network of experts who will fight like a Pitbull to protect your interest.

Next to this, you could help the lawyer by writing down everything the selling party claims and write these claims as reservations into the option buying contract. In case you are buying land on Ibiza and the plot had been described as being much better than it actually is, you are not legally obliged to buy the property. Don’t believe everything that is being said, get it in writing.

When wanting to build a house make sure you look a bit further than pricing

Firstly make sure there is a construction contract and make sure that the quotation you get offered is a very transparent one. The quality of products and people vary a lot. When choosing the cheapest option you might end up with a lower quality and delays, but also be aware not to pay a high price for low quality products. The best way to know if you have chosen ‘the right one’ is to collect reviews from other people who have worked with the people you are looking to work with. By asking for referrals to the builder or your own network, you also give a sign of ‘being in the know’ to the builder, which will keep the contractor further away of screwing you or sending unnecessary extra bills.

To avoid delays it’s good to know if the contractor is using their own builders/machinery or if they are hiring from third parties. You can imagine that the last option needs a very tight planning and relying on availability at other companies. Companies who use their own resources are much more agile and therefore able to finish your project within the agreed period and thus without delays. Also, if a constructor is as good as he claims he is, demand a guarantee on the construction within the construction contract.

Thinking about buying a property in Ibiza?

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