Buying a (second) home in Ibiza, pain or pleasure?

Buying property in Ibiza should be fun. You choose to buy a second home for your family to enjoy time together, or maybe you want to use it as an investment and start renting out. Whatever your motivation, the purchasing process is not an everyday activity and should be enjoyed. After all, it's the start of a new adventure. However, real estate law in is different in every country and should be taken seriously if you don't want to get in trouble.

As a former Alicante resident and Ibiza resident for 1,5 years, I know a bit about the Spanish real estate market and its traps. I mean, most people I speak to who bought a property in Ibiza or are in the process of buying, are surprised or confused about the purchasing process. Real estate agents want to sell houses and make money. They are not neutral. Not to speak about the negotiation part with Spanish homeowners, they are stubborn as a mule. But mostly, I hear complaints about the slow communication with authorities and all rules regarding real estate. Hard to keep up.

Buying property in Ibiza can be very risky if you don’t know the law or island. It’s like buying stock without any knowledge.

So I visited real estate lawyer Armin Gutschick from Ibiza Legal and asked him questions about real estate law in Ibiza to understand the purchasing process better. Now I can share some valuable information with you, and hopefully, it will save you from making common mistakes.

But first, let’s introduce Armin

Armin was born in Bonn, Germany, in 1973. He studied law in Germany and France and did a legal clerkship in Cologne. In 2002 Armin moved to Barcelona, where he started his Spanish real estate law career. Armin is married to Anja, a lawyer as well, and together they have lived in Ibiza since 2006. You can imagine he knows all ins and outs in Ibiza and has a great network. What amazed me was that Armin speaks four languages fluently. Besides Spanish and German, he speaks English and French as well.

So what does the Ibizan real estate market make buying property so challenging?

The most common mistake made when buying property in Ibiza.

In Spain, anyone can become a real estate agent. There are no rules or specific licenses or education obliged. Anyone who gets the chance will act as real estate agents. And can you blame them? The Ibizan real estate market is on fire, and there is a lot of money to be made.

But because there are so many agents, it's challenging for you as a potential buyer to find an honest and trustworthy agent in Ibiza. An agent dedicated to finding your dream property who can meet your expectations Let’s be very clear here, a real estate agent works for himself and he will make a lot of money when you buy through him. The fees for real estate agents are around 5% of the purchase value, so you can imagine that he is very interested in selling you the property.

Why? What is the worst that could happen?

The thing is, in Spain, any form of contract counts. Different from other countries in Europe, in Spain, you don’t need to go to the notary to make the signing of a valid contract. Any real estate agent can draw up a contract, and once you’ve signed, it is legally binding. You are bound to the contract, even if you don’t have the budget or if it turns out, that the property is not legal.

 So be careful when asked to sign a ‘preliminary purchase contract’  or a “reservation” to ensure the house will not be sold to someone else while you take time to arrange financials or check documents. A preliminary purchase contract is legally binding in Spain.


The biggest mistake made by property purchasers is signing a contract with a real estate agent without consulting a lawyer.

What should you pay attention to when buying a house in Ibiza?

In Spain, it often happens that homeowners independently expand their home with more m2, renovations for which no permits have been applied for and are therefore actually illegal. The asking price is often based on the number of m2 offered. A real estate agent is not reliable for his actions and is not obliged to check if everything is legal. And if you don't speak the Spanish language, it can be a considerable challenge to find out if what you're buying is legal.

As the new owner of a property, you will be held responsible for anything that is not according to the rules, which can add up considerably in paperwork and financial consequences. Not a fun way to start your new life in Ibiza.

Another thing you should know about purchasing a property in Spain is when you take over a property, you also take over existing debts. All unpaid bills such as electricity, taxes or other property-related costs are for your account as the new owner. This can be small amounts but also thousands of euros.

Why hire a lawyer? What does he do for you?

A lawyer protects you as a buyer and can prevent you from ending up in undesirable situations. Your lawyer makes sure that the property of interest is legal in terms of administrative licenses and inscriptions in the registry. And if necessary, he will go personally to the construction department of the corresponding town hall, check the papers and talk to the town hall architect.

Your lawyer works for you and in your best interest.

The benefits of hiring real estate lawyer Armin

• Armin speaks Spanish, German, English and French. The language barrier is removed.
• You are the only one paying him for his services. Armin works for you and has your interests in mind.
• Armin can save you a lot of money and especially a lot of time and energy by doing all the necessary research in advance.
• In Ibiza, communication with authorities is not as smooth as we are used to in other countries. Armin knows his way around, has built up a network, and can act faster. The purchase process will go more smoothly.

Costs that come with buying property in Ibiza

Are you interested in purchasing property in Ibiza? Keep the following costs in mind:

Notary fee

Approximately 1.000 - 1.500 € depending on the value of the property

Registry of the property

Approximately 1.000 – 1.500 €

Taxes on property transfer

Since the 1st of January 2022, the taxes on the property transfer have increased. The range for the land taxes lies between 8 and 11,5 % of the purchase value. The tax on property transfers is a state tax  however, it is collected by the Balearic tax authorities. It is calculated upon the property's actual value laid down in the notary deed, and the buyer must pay it.

Lawyer’s fees

Based on what I've learnt in this conversation with Armin, I recommend finding legal advice from start to end, which means that once you've found a property of interest, your lawyer will check the legal circumstances of the property (for example, ownership, charges, cadaster inscription etc.). Your lawyer drafts/checks the private contract prepares the notary deed and accompanies you to sign the notary deed. After that, the corresponding tax payments are paid and the inscription in the land registry and the cadastre.

If needed, he will also help open a bank account and apply for the NIE (tax number for foreigners). 

Hiring a lawyer should be your first step when purchasing property in Spain. Because when you are not familiar with the Ibizan market and Spanish law, buying a home in Ibiza can be a tricky game, and sharks are lurking.

For whom?

It doesn’t matter where you are from, your budget, or what type of property you are looking to buy. Armin is happy to help anyone set up a life in Ibiza. And not only real estate wise. Starting a new business in Ibiza and inheritance law are other areas where Armin is specialized and where you could benefit from his experience and network.