Purchase costs on Ibiza
How high are the purchase costs on Ibiza? We assume the Spanish rates, because with a house on Ibiza you buy a property in Spain. In Spain there are quite a few costs that have to be taken into account. For example, the question is whether you have to pay ITP (transfer tax) or sales tax (IVA) and how high that percentage is. For a property with a value of over € 1,000,000 you normally pay 11.5% transfer tax. If you buy a new property on Ibiza directly from the developer, you have to pay 10% sales tax (IVA). Villa Cas Mut you buy directly from the developer (Ibiza Dream views House S.L.), so you pay only the sales tax and you save already 1.5 percent compared to an existing villa.
Besides the IVA you pay notary fees and registration costs. The transfer deed for a property is signed by a public notary. Subsequently, the details are registered in the land register of Ibiza: the Registro de la Propiedad. These costs fluctuate between 1 and 2% and depend on the region in which you buy the property. Furthermore you pay a lawyer’s fee. You will need this to supervise the purchase process and to iron out any legal obstacles. You can take into account 1 per cent of costs. If you apply for a mortgage to finance the property, you will pay a 2-3% fee to secure the mortgage.
Advantages new-built
Apply for a mortgage
In order to obtain a Spanish mortgage, there are a number of conditions. You must contribute at least 40 per cent of the purchase price from your own resources. Different to the Netherlands, in Spain you must finance at least 30 to 40 per cent of the property yourself. The bank will finance a maximum of 60 to 70 per cent of the value of the property. In addition, you have to pay the purchase costs yourself (see purchase costs on Ibiza above).
As a buyer, you should have sufficient income to apply for the mortgage. This income must be demonstrable and must be earned through wages from entrepreneurship, employment or (rental) income from assets. Only 35% of the income is taken into account for the mortgage assessment. In addition, banks will assess your personal situation. They will take into account the composition of your family, whether you rent or buy a house and the age of any children. Also take into account that they will look critically at the type of work you do and what type of income you earn with it.
Other matters
In order to live and buy a property in Spain, you need to apply for a NIE number and Empadronamiento. The NIE number is an identification number for foreigners in Spain. It is also compulsory when the property is used as a second (holiday) home. The Certificado de Empadronamiento is the registration at the municipality.
When buying a house in Spain you will always need a Spanish bank account. Whether you are using a mortgage or paying for internet, water and electricity, these payments will always take place through a Spanish bank account. Furthermore, just like in the Netherlands, you will need to take out home and buildings insurance with (often) one policy. Finally, matters such as internet, water and electricity are important to arrange at an early stage.
For the purchase of Villa Cas Mut, future residents enjoy a 10 per cent down payment instead of the usual 20 per cent and do not pay any construction and land interest.
