6 golden rules when buying a property in Ibiza
Armin Gutschick & Anja Sämann-Gutschick
1. Check that the seller is indeed the owner of the property, either requesting to see the sales deed or asking for what is called a Nota Simple from the Property Registry. Check also that the details of the buildings recorded at the Property Registry (Registro de la Propiedad) coincide with those that appear at the Records Office (Catastro).
2. Before signing any written agreement with the seller, check the following details regarding the property:
• If you are buying a property that includes a house, make sure it has been built with the appropriate building permit. Many people mistake the record at the Registry with the building permit that is issued by the town planning department of the local Council. From a municipal point of view, a building is only legal if it has the right building permit (licencia de obra) and as-built certificate (certificado de fin de obra), whether or not it is recorded at the Property Registry.
• Request that the seller show you the latest water and electricity bills, as well as the occupancy certificate (cédula de habitabilidad) and make sure that there will be no problems with contracting the services of these suppliers.
• Make sure that the actual surface of the property coincides with what is recorded at the Property Registry.
• Check whether the seller is entitled to sell the property him/herself or if s/he needs the consent of their spouse in order for the contract to be valid.
• Check all debts, taxes and fees that appear in the Nota Simple.
• Are there any taxes that affect the property? Request that the seller present you with proof of payment of the IBI (council tax) over the last years. In this way you will also find out how much you will have to pay in the future for this tax.
• If the property is subjected to the Horizontal Property Law, request that the seller prove that s/he is up to date with payments to the Community, via a certificate from the President of the Community.
3. Insist that a private purchase agreement be drawn up that contains the specific conditions that you have agreed with the seller, instead of using a template contract. Make sure that all the commitments that the seller has agreed to are detailed in writing, even if they seem of little importance. Template contracts tend to cause confusion and can lead to arguments between the contracting parties when it comes to formalizing them before a Notary. One of the main functions of a Notary in Spain is to guarantee the buyer that s/he is purchasing a property that is free of debts or charges. However, the Notary’s task is not to provide legal advice to the buyer nor the seller, but only to certify what both contracting parties agree. This is why it is advisable to seek the counsel of an expert in this matter, even if the purchase does not appear to present complications. The fees of an advisor are a minimal part compared to the losses that a disadvantageous contract can entail.
4. If you are the buyer, insist on the public sales deed to be drawn up without delay even if the payment is agreed in installments, so that you may be recorded as the owner in the Property Registry as soon as possible.
5. If you are buying in installments directly from the developer of a building which is under construction, the seller must prove that an insurance has been hired or that there is a bank guarantee that covers the deferred payments.
6. Find out about the costs and taxes that are involved in the purchase of a property. Costs incurred: notary and lawyer fees plus Registry taxes add up to around 3 to 4% of the price of the purchase registered on public record. To this you must add the tax on property transfers (which in the Balearic Islands increases progressively from 8 to 11% depending on the purchase price) or VAT (10% for new constructions and 21% for commercial properties) plus the Tax on Documented Legal Acts, which comes to 1,2% of the value registered on public record. •