There is unprecedented demand for property for sale in Ibiza right now. Sales have generally always been high, but a shift in the way people work, as well as changing property priorities, have altered the focus of home-hunting. Working in the business every day we can draw a few preliminary conclusions from the m2 price development, the current interest & historic data. In the past crisis of 2008-2013, prices went down by 21% in the Netherlands & 26% in the UK, whilst Ibiza saw consolidating prices by not more than 10%. Ibiza, being a brand-name property market is strong, and we don’t see this to change in the next years. However, we expect that buyers will have slightly more power in the upcoming months/years.
Purchasing home in Ibiza is still possible following the UK’s withdrawal from the European Union; however, there is now slightly more red tape to cross. You can find more info in our Blog: How Brexit Has Affected UK Buyers Buying Property in Ibiza
Yes, you can get a Spanish mortgage. While getting a mortgage in Spain for non-residents can be challenging, but certainly isn’t impossible.
- NIF – the Tax Identification Number (for locals) or NIE – the Foreigner Identification Number (for foreigners) or the passport
A signal or deposit contract, if signed (it is a private contract through which the parties agree to an amount of money given in advance for buying a property)
- The income tax return for the previous year
- The deeds regarding any real estate that you own (no matter where)
- The lease contract and the last rent-payment proof (if you live on rent)
- The most recent bank statements on your name
Yes, in order to buy or rent you must have a Spanish bank account or in Spain. International buyers must have a bank account in Spain.
Unfortunately, not every property in Ibiza is eligible for a touristic license. Many are shocked to learn that touristic licenses are not available for apartments. In fact, only detached properties can apply for these licenses.
This does not mean a touristic license will be granted for all detached properties, but merely they are the only ones who can meet the criteria to apply.
- To apply for a touristic license in Ibiza, there are a number of minimum requirements that the property must meet:
- The property must have a valid certificate of occupancy. Known as the cedula de habitabilidad.
- The property must be located within a tourist zone. Tourist zones are established on many factors, including environmental data, population information and planning criteria. Tourist zones correlate directly to the level of tourist influx that the area can support; without significant repercussions on its resources and management capacity. Importantly, these tourist zones are allocated with the local residents’ quality of life as the primary concern.
- A home cannot be rented as a holiday home where a sanction has previously been imposed, for a ‘serious’ or ‘very serious’ infringement of the holiday rental licencing laws. This prohibits the property from being used as a holiday rental until the sanction has been fulfilled and the property’s legality is restored. So, when looking for a property to obtain a touristic license, always ask for a ‘certificado de inexistencia de infraccion urbanistica’.
- The property must be at least five years old before it can obtain a touristic license. During those five years, the house must have been used as a private residence.
- The property must have a relevant active energy certificate. This means the house must meet specific energy efficiency requirements—rating F for buildings constructed before 31/12/2007 and rating D for buildings built after 01/01/2008.
Without a touristic license, you can still rent a property legally in Ibiza. But it can only be long-term rentals, which need to be for longer than one month. Additionally, the property must not offer any touristic services.
Buying new developments is an increasingly popular practice in the world of home-buying. At its heart, it means purchasing a property in advance of it being built. It’s a very popular way of buying property in Ibiza, new homes are highly sought after and prices are steadily increasing, and it can be a profitable way for investors to buy property. Typical yields for buy-to-let property in Ibiza are 3-5% excluding the appreciation of the value over time. Property prices have more or less (depending on the location) doubled in the past 10 years! In 2019, 2020 & 2021 we have seen a period of consolidation in property prices after which we expect property prices to keep increasing in the next 5-10 years. In 2021 we have seen a real property boom and properties have been selling like hotcakes. This has created more scarcity on the market and fuelled by more wealth in Europe, we expect property prices to rise.
There are many benefits to buying a property off-plan. Some of the main ones are below, and more are explained on this page ‘What is buying off-plan?’:
- Off-plan properties are usually available at a lower price than pre-existing properties.
- In many cases, there are very attractive payment plans.
- The value of a property often increases during the construction phase, meaning you can make money before you even receive the keys. How much deposit will I need to pay, and will it be secure?
- Usually, buyers will need to pay between 10%-30% of the property’s value as a deposit. Deposits are paid into a secure holding account with a bank guarantee, meaning that, in the unlikely event of a contract being breached by a developer, your money is protected.
In general, buying off-plan property is much safer than other investments, such as purchasing shares, where values tend to be less stable. However, that doesn’t negate the need for in-depth research first, which you can do yourself, or a LET US property specialist can do for you. Buying within your means is, financially, the most risk-free way of investing in property.
The most important way you can safeguard your deposit is by requiring a bank guarantee. This paper makes sure you have the right to the funds once a developer goes bankrupt. However, a developer going bust is an unlikely occurrence nowadays.
This can be tricky and you will need to clarify this with your lender, as your mortgage can depend on the value of the property but in most cases this is not an issue especially if you can subrogate the mortgage from the developer.
Don’t expect your property to be identical to the artist’s impression shown in the brochure, but it’s likely to be very similar. You will be provided with a list of what’s included and which finishes have been selected.
Also, your LET US property specialist will do a settlement inspection to make sure there are no snagging issues that need to be rectified, or to make sure they’re actioned if there are.
In plain terms, the best time to purchase an off-plan property is when you can afford it. Although buying in a rising market can provide opportunities for capital growth, the general advice is ‘the sooner the better’ when purchasing property, as values tend to consistently increase over time. If you wait too long, you may find yourself priced out of the market.
It’s essential that your property is checked over before you complete the purchase. There are a number of ways to do this. You might be confident to complete the final property viewing yourself. You may want to arrange for a surveyor to visit and give it the once over. Or maybe you’d prefer for LET US to check and complete the snagging process on your behalf. Whatever your preferred approach, contact us and we’ll explain the process in detail.
The developer will be able to tell you whereabouts in the construction schedule your property will be completed. This will give you an indication of how long you’ll be surrounded by building work, so you can plan your visits accordingly.
Once the construction work has finished, the project must be signed off by the on-site architect. Hereafter, there is an inspection from the town hall architect who checks the relevant paperwork which subsequently proves that the project complies with what has been agreed on. As well there is a final check on the habitability of the development.
No. Although developers can make it appear that using their conveyancer will save you money and speed up the process, this isn’t necessarily true. Make sure you instruct whichever lawyer you are comfortable with.
If you’re purchasing from a reputable developer, they should safeguard your money throughout the construction process.
As you will be making payments at defined points in construction progress, the developer will be in receipt of large sums of your money, and they should be able to explain where and how your money is being held during the process.
For more information on the possibility of renting out your property to visitors short-term, check out our blog post ‘A complete guide to the tourist license in Ibiza 2021’. In general, you can say that you will always need a tourist license to rent out for short-term rental purposes. Without a tourist license, you can rent your property for periods from one month or longer which is considered a long-term rental. Adding to this, you can rent your property for more than one month but without advertising on touristic portals like Airbnb or similar.
Ibiza offers a healthy long-term rental yield of between 3% and 5%. LET US Ibiza can provide a more detailed analysis of the expected rental yield for properties in your chosen development.