Buying a dream home in Ibiza is one of the most exciting things you can do. However, buying and owning a property in Ibiza comes with upfront and ongoing costs that all potential and active buyers must be aware of before signing on the dotted line.
It is crucial to consider the upfront costs associated with buying a property, such as the down payment, closing costs, and fees, but mostly forgotten are the ongoing costs, such as maintenance, taxes, insurance, and utilities, that will inevitably occur. A clear understanding of the costs of purchasing a home in Ibiza will help you determine if you are happy with the annual outlay.
You can find our How to Buy a Property in Ibiza guide on our website; written with our buyers in mind and covering all those essential costs to consider when buying a property in Ibiza. But, in the meantime, let’s be clear about the ongoing costs of owning a property in Ibiza, so you know what to expect, once you call Ibiza your home.
The costs associated with Owning a Property in Ibiza
Multiple tax implications are associated with the cost of owning a property in Ibiza, Spain. To own a home in Ibiza, you must consider all tax implications -– so here’s a quick overview that will help you understand these costs.
Understanding Property Taxes in Ibiza for Homeowners
Your IBI (Property Tax)
The IBI (Impuesto sobre Bienes Inmuebles) is a real estate municipal tax on properties in Spain that must be paid each year by property owners in Ibiza – regardless of whether you’re a resident or not.
To figure the amount, the town hall assigns a value to your property known as the cadastral value. This value will be taxed at the same rate approved by each town hall within the specific municipality.
While IBI is charged as a percentage, the tax bill depends on the property’s cadastral value. This rateable value, in turn, is determined by a number of factors, which include the property’s:
- Size and location
- Construction costs
- Title and lease details
- Age and condition
- Land characteristics
- Proximity to public infrastructure
Using this information, the local town hall compiles a report assessing the property’s rateable value and assigning a taxable "valor catastral" to each property in their area. These records are kept by the cadastral registry (which is different from the land registry office).
When purchasing or interested in a specific property, the best advice is to ask your real estate agent for the most recent IBI bill of that property which will show the exact amount applicable for this specific property.
Your Basuras (Waste Collection Tax)
A local charge needs to be paid at the town hall where your property is located for rubbish removal. Each town hall determines the amount due, which varies from place to place. It is imperative to note that it is still necessary to pay for a property even if it is not occupied during the off-season. The town hall has the right to take legal action if payment is not made within a certain period of time.
Typically, the waste collection cost when owning a property in Ibiza is around 90 euros annually.
An Overview of Maintenance Costs when Owning a Property in Ibiza
General Maintenance Costs
All the additional services designed to maintain the property’s general condition and upkeep are included in the General Maintenance bracket. Property owners should expect annual costs of 1-2% of their property value to keep their houses healthy, fully maintained and stable.
These services may cover anything from basic repairs and house maintenance, home improvements, property management services, pest control, security checks, cleaning, gardening and pool maintenance. These include annual agreements, monthly advanced services, and one-off payments for individual services.
Although these extra costs of owning a property in Ibiza may not feel necessary, the overall investment will ensure that the property’s value moves in line with the Ibiza property market trend (up!).
Home Improvements and Renovation Costs when Owning a Home in Ibiza
Property owners who rent their property will have higher maintenance costs, as rentals often require additional services and rental support which tend to arise from more wear-and-tear than non-rental properties. This may mean a higher budget for general yearly maintenance service is needed –– as well as regular home improvements and renovations to keep your home modern and up-to-date.
The purpose of home improvements is not only to enhance the living experience but also to increase the market value of the property and its rental potential. Landscape projects, energy solutions (e.g. solar panels), better water systems, interior improvements, carpentry, ventilation and construction are all great examples of these services and projects that may be noteworthy costs of owning a property in Ibiza.
Larger Renovation Projects
In Ibiza, renovating a property can be a very rewarding experience, allowing you to create your dream home. It is also possible to reap impressive returns from a renovation project if planning and renovation are done properly – although there will be upfront and ongoing costs involved.
Check out our guide on Renovating a Property in Ibiza – Everything You Need to Know if you’re thinking of buying or renovating a house in Ibiza!
Costs of with selling a property in Ibiza
Just as there are costs associated with the buying process, there are also costs associated with selling your property. Please check out our Seller’s Guide, which will walk you through all the relevant and associated costs when selling your property in Ibiza.
If you have further questions about the costs of owning a property in Ibiza, why not chat with one of our agents? They can also assist you in finding a suitable property investment or help you list your house on the Ibiza market.
