Spain is one of the most popular European locations on JamesEdition, and Ibiza, once only known as the Spanish party island, is now stealing the spotlight as a top property investment destination.
Spanish property market
2018 has been the best year of the decade for the Spanish residential market. According to figures released by the National Institute of Statistics (INE), 43,536 home sales were registered during the first 10 months of 2018 in Spain. This is an increase of 15.8% compared to the same period in 2017. It must be said, however, that property prices on the Balearic Islands have had a decrease of 5.2% compared to 2017, but this is possibly due to prior unsustainable price increases; they are expected to moderate during 2019.
More than a party island
For what it seems like forever Ibiza has been known as a clubbing destination but it is fast becoming a sought-after place to live. With regular flights to major European cities, it is possible to go from a business suit in London to flip-flops on your sun deck in a matter of hours. Successful entrepreneurs are choosing stylish villas with ocean views and smart investors are buying properties with tourist appeal.
A place to visit – and invest
For centuries, Ibiza has been of interest to outsiders. Carthaginians, Phoenicians and Romans saw it as a strategic place for trade in the Mediterranean, and other visitors, from the barbarians in the Middle Ages to the hippies today have set their foot on this idyllic island.
According to The Daily Telegraph, in 2017 Ibiza received 3,236,360 tourists, a 5% rise on the 3,061,895 that visited in 2016. British, Spanish and Italian visitors make up the majority of incoming tourists.
While they come, party and leave, serious investors and buyers seek out properties with a highly desired tourist license near the popular tourist district. They are in the biggest demand for summer rentals, give the best return on investment, have the best resale value and highest rental prices.
The question of tax
In general, buyers should budget for approximately between 11% and 14% for the property tax, depending on the value of the property and whether or not it requires a mortgage. There is also the wealth tax to be considered. The local government gives buyers a tax-free allowance of €700.000, with tax rates starting at 0.2% and raising to 2.5% after that. Non-resident landlords are subject to income tax on their rent earnings, and resident property owners pay the IRPF, or personal income tax.
Top three Ibiza neighborhoods
The local government is making an effort to attract affluent residents, and the strategy seems to be working. High-end yachts are everywhere, and boutique hotels and restaurants are receiving high paying clients all year round.
Marina Botafoch, Cap Martinet, Can Pep Simó are in great demand with buyers who want to live in exclusive communities and yet be сlose to Ibiza town, fine restaurants, shops and the marina.
Home to buy: Apartment in the most emblematic building in Ibiza
Las Boas by Jean Nouvel is the most emblematic building in Ibiza, located in the best area of the Marina Botafoch
The Las Boas concept offers a unique living experience with panoramic views towards the old town of Ibiza and the port. It’s a lively harbour whose extension is due to be completed in 2019, is situated in the city of Ibiza right on the Mediterranean Sea. Estela Exclusive Homes is selling an apartment with sea views, for €1.9m.
Designed by the architect Jean Nouvel, the Las Boas building is located opposite the port’s main entrance and within walking distance to the most exclusive restaurants, night clubs and fashion stores. It boasts an underground garage, a sauna, a Turkish bath and a gym with high-end equipment. All apartments have integrated air conditioning. A 24-hour concierge service, CCTV cameras and individual security codes should satisfy the most demanding, security-conscious buyer.
Can Pep Simó
Home to buy: Modern villa facing the sea and Formentera
Modern villa with beautiful views on Formentera and Dalt Vila, close to Ibiza town
Another prestigious area is Can Pep Simó, a neighbourhood that lies to the north of Ibiza Town and within minutes of Marina Botafoch and the Talamanca and S’Estanyol beaches
Cap Martinet is one of the most sought-after locations in Ibiza, possibly because it manages to be both quiet, secluded and private – and within a short driving distance to the bustling Ibiza Town.
The island now has many Europeans, especially the British and Germans, who are buying property here and sending their children to excellent international schools. Clearly, Ibiza is too good of an opportunity to miss, both in terms of investment and lifestyle, and smart investors wouldn’t want to be late to the party.