Costs of Property Ownership in Ibiza
Owning a home comes with expenses worldwide, and Ibiza is no exception. In addition to regular maintenance and utility costs, there are specific tax-related expenses associated with owning property in Ibiza.
We always advise our clients to consult a (tax) lawyer to determine which taxes apply to their personal or business situation. The lawyer also ensures that all documents are correctly filed with the relevant authorities and that taxes are paid on time.
Property Tax – Impuesto Sobre Bienes Inmuebles (IBI)
The most well-known tax in Spain is the property tax, known as IBI (Impuesto Sobre Bienes Inmuebles). This local tax must be paid annually, regardless of whether you are a resident or not. The IBI is calculated based on the 'Valor Catastral' (the taxable value) of the property, which is often lower than the market value. The Valor Catastral is typically around 70% of the market value and can be re-evaluated every eight years. The tax rate ranges between 0.4% and 1.1% of the Valor Catastral, depending on the region.It is crucial that your lawyer registers your home with the town hall of your municipality.
Non-Resident Income Tax (Impuesto sobre la Renta de No Residentes – IRNR
If you own property in Spain, you must pay income tax annually, even if you are not a resident. This tax is known as the Impuesto sobre la Renta de No Residentes. The tax varies depending on whether the house is rented out or not.
Not RentingIf you do not rent out your house and have no other income source in Spain, you pay income tax based on the Valor Catastral of your house. The tax rate is 19% on approximately 2% of the Valor Catastral.
Renting OutIf you rent out your house, you must declare this income and pay income tax on it. Without other income sources in Spain, you will likely pay a fixed rate of 20% on the income from your property in Ibiza. When you have other income sources in Spain, the taxable income and tax rates will be determined based on your individual situation. Maintenance costs, property management fees, and other related expenses can usually be deducted from the taxable income.
Wealth Tax (Impuesto Sobre Patrimonio)
Property owners in Ibiza must pay an annual wealth tax based on the net value of their assets in Spain, after deductions such as a mortgage. The tax-free allowance is €3,000,000. Above this amount, the tax rate ranges from 0.28% to 3.45% for residents and from 0.2% to 3.5% for non-residents.
Community Fees
Buying a property in a gated community or resort offers many benefits, such as additional amenities, security, and privacy. When purchasing a resort property or apartment in a complex, you become a member of the Comunidad de Propietarios (homeowners' association). This means you contribute to the service fees for maintaining common facilities and other services. These costs vary by property, so always inquire about them before purchasing a home.
Insurance
All property owners should consider the cost of home insurance. The cost of this insurance varies depending on the property’s size, contents, and the owner’s situation.
Service
At Remax Isla Blanca, we are here to guide and advise you on all aspects of property ownership in Ibiza.
Contact us for more information and expert advice
