Buying or selling property in Ibiza involves several taxes and legal procedures. As of 2025, significant changes to Balearic tax laws have been introduced to ease the burden on local residents and young buyers, while Spain has also implemented new measures affecting high-net-worth property owners and foreign investors.
Whether you are a Spanish resident or an international investor, understanding the local tax landscape is essential for making informed decisions. This guide offers a comprehensive overview of property transfer taxes, ongoing ownership costs, and key regulations in Ibiza.
Buying Property in Ibiza: Resale or New Build?
Resale Properties – Transfer Tax (ITP)
When buying a second-hand property in Ibiza, you’ll pay ITP, a regional tax with progressive rates:
- 8% on value up to €400,000
- 9% on €400,000–€600,000
- 10% on €600,000–€1,000,000
- 12% on €1,000,000–€3,000,000
- 13% on value above €3,000,000
For a resale home priced at €800,000, the total Transfer Tax (ITP) would be approximately €70,000, which equates to an effective rate of around 8.75%.
The tax must be paid by the buyer within 30 days of the purchase date, using Form Modelo 600, and submitted to the Balearic Tax Agency (ATIB). The amount is calculated based on the higher of the declared purchase price or the official appraised value of the property.
ITP Discounts (2025):
- 4% ITP: First home ≤ €270,151, used as primary residence
- 2% ITP: Young buyers (under 36) or people with disabilities, for first homes ≤ €270,151
- 100% exemption: Local residents under 35 with modest income (≤ €52,800), buying a first home ≤ €270,000 (set to rise to €350,000), and financing at least 60% with a mortgage
To retain these benefits, the buyer must live in the property and maintain ownership for a minimum of three years; otherwise, the tax savings must be repaid.
New Properties – VAT (IVA) & Stamp Duty (AJD)
For new builds bought from a developer:
- VAT (IVA): 10% of the purchase price (residential)
- Stamp Duty (AJD):
- 1.5% standard rate
- 1.2% for first homes ≤ €270,151
- 2% for properties ≥ €1 million
- 2.5% for company-to-company sales waiving VAT exemption (rare)
Purchasing a newly built villa priced at €800,000 would incur €80,000 in VAT (IVA) and an additional €12,000 in Stamp Duty (AJD).
Both taxes are the responsibility of the buyer. IVA is paid directly to the seller as part of the transaction, while AJD must be filed separately with the Balearic Tax Office once the sale is completed.
It is also worth noting that, under current regulations, banks are required to cover the AJD associated with mortgage deeds, meaning buyers are only liable for the AJD on the property deed itself.
For a step-by-step overview tailored to Ibiza’s property market, take a look at our detailed Buyer´s Guide, where you’ll find expert insights tailored to purchasing property in Ibiza.
Selling Property in Ibiza: Taxes and Key Rules
If you’re selling property in Ibiza, you’ll face two main taxes: Capital Gains Tax (CGT) and the Plusvalía Municipal (municipal land tax). Your residency status—Spanish resident or non-resident—will determine how CGT is calculated.
Capital Gains Tax (CGT)
Spanish Residents:
- CGT is applied progressively based on the profit:
- 19% on the first €6,000
- 21% on €6,001–€50,000
- 23% on €50,001–€200,000
- 27% on €200,001–€300,000
- 30% on gains over €300,000
Exemptions apply if the seller is over 65 and selling their primary home, or if the proceeds are reinvested into another main residence in Spain.
Non-Residents:
- A flat CGT rate of 19% applies to the entire gain.
- Non-residents must file using Model 210 and pay within a few months after the sale.
Under the 3% withholding rule, the buyer is legally required to retain 3% of the property’s sale price and pay it directly to the Spanish Tax Agency on behalf of the seller. This amount serves as an advance payment towards the seller’s Capital Gains Tax liability.
Plusvalía Municipal (Municipal Land Tax)
- Charged by the local council based on the increase in land value over the ownership period.
- Calculated using either the cadastral land value or the actual profit—whichever results in a lower tax.
- Typically paid by the seller within 30 days of the sale.
- No tax is due if the property is sold at a loss.
- The tax caps after 20 years of ownership; it does not increase beyond that point.
Thinking of selling? Our Seller´s Guide makes the process easy to understand and simple to follow.
Annual Property Taxes & Ongoing Obligations in Ibiza
Owning property in Ibiza involves several annual tax obligations for both residents and non-residents. The most common is the "Impuesto sobre Bienes Inmuebles" (IBI) — a local tax based on the cadastral value, with rates typically ranging from 0.4% to 1.1%. It is paid by the registered owner as of 1 January, and bills are usually issued mid-year.
For high-value holdings, Wealth Tax may apply. As of 2025, the first €3 million per person is exempt in the Balearic Islands. Residents are taxed on worldwide assets, while non-residents are taxed only on Spanish assets. Rates start at 0.28%, rising for wealth above €10 million. In addition, a Solidarity Tax applies nationwide to net assets over €3 million, with rates of up to 3.5%, although any local Wealth Tax paid may be offset
Non-resident owners must also declare an imputed income tax if the property is not rented out. This assumes a notional rental value based on the cadastral figure, taxed at 19% for EU/EEA residents and 24% for others, and filed annually using Modelo 210.
Other Regulations for Property Owners in Ibiza
No Restrictions on Foreign Buyers
As of 2025, foreigners—both EU and non-EU nationals—are free to purchase property in Ibiza, enjoying the same rights as Spanish citizens. Although restrictions on non-resident buyers have been considered, no such measures have been implemented. Foreign buyers are required to obtain an NIE (Foreigner Identification Number) and must declare the origin of funds in compliance with anti-money laundering regulations.
End of the Golden Visa
As of 2025, Spain has officially ended its ‘Golden Visa’ scheme for property investment. Non-EU citizens can no longer obtain residency by purchasing real estate worth €500,000 or more. Existing visa holders retain their status, and alternative residency routes such as business or government bond investment—may still be available.
Buyer and Seller Obligations Recap
Buyers
- Budget 10–13% of the property price for taxes (ITP or IVA + AJD, depending on property type).
- Withhold 3% of the purchase price when buying from a non-resident seller and pay it to the Spanish Tax Agency (legal requirement).
- Obtain an NIE (Foreigner Identification Number) before purchase.
- Plan currency exchange and international transfers well in advance.
- Hire a local lawyer to check for any outstanding debts tied to the property (e.g. unpaid IBI or community fees), as these may transfer with ownership.
Sellers
- Prepare to pay Capital Gains Tax (CGT) and plusvalía (local land tax).
- If non-resident, inform the buyer of the 3% withholding and file Form 210 within 3 months of the sale to claim a refund or pay any difference.
- Consider working with a tax advisor to calculate deductions and reduce taxable gain.
- Residents selling their primary residence must reinvest the proceeds within two years to qualify for CGT exemption.
- Ensure plusvalía is paid to the town hall within 30 days of the sale; notaries typically include reminders in the sale deed.
Regional Nuances in the Balearic Islands
While Spanish property law is largely consistent across the country, Ibiza and the wider Balearic Islands have a few regional regulations that property owners should be aware of:
- Tourist Rental Licences: Short-term rentals (e.g. Airbnb-style lets) are strictly regulated. A licence is required, and not all properties are eligible due to zoning laws and community restrictions. Letting a property without a licence can result in significant fines.
- Protected Rural Land: Certain areas are designated as "rustic" or protected land, subject to more restrictive building regulations. Buyers should always check local planning rules before purchasing land intended for development.
- Inheritance and Gift Tax: The Balearic Islands have their own inheritance tax regulations, offering favourable exemptions for close relatives. Foreign owners are advised to seek estate planning advice, as Spanish inheritance laws — including forced heirship — may still apply.
Making Smart Moves in Ibiza’s Property Market
Owning or investing in property in Ibiza offers exceptional opportunities, but it also comes with important tax and legal responsibilities. Understanding the full scope of costs is essential for making informed decisions and avoiding unexpected expenses.
For peace of mind, it’s always best to consult official guidance or a trusted advisor. The Prestige Properties Team is here to support you every step of the way, offering expert advice to help you navigate the process smoothly and confidently.
