If you are considering to buy a property in Ibiza, then getting the right support team in place is an important step.
Not only will you gain access to insider knowledge and valuable connections by working with local experts, they can also save you time, money, and help to avoid pitfalls you might not have even thought about!
As we continue with our guide on how to buy a property in Ibiza, in partnership with real estate agency Fantastic Frank Ibiza, here we take a look at the legal side of becoming a homeowner in the Balearic Islands.
And if you missed the first part about finding the right mortgage, you can check it out here.
So let’s talk legalities! Often referred to as ‘the boring bits’, the legal elements of any contract or property purchase are best left to those who have studied many years to know the local jurisdiction.
Having a trusted lawyer on board who knows the market and is connected to the local authorities is key to completing the process of buying a house in Ibiza – and other parts of the Balearic Islands – as smoothly and stress-free as possible.
We spoke to lawyer Ignacio Rodríguez, who is working with Fantastic Frank Ibiza real estate agents Jason Ham and Izabela Swiecicka to help buyers and sellers in the Balearic Islands achieve the best possible property deal, about that all important small print!
Thank you for your time, Ignacio! Please tell us a little bit about yourself.
I was the Head of Legal at PwC Mallorca until June 2023 when I decided, after more than 20 years of working there, to set up my own Law Firm, RPP & Partners, with part of my team: Paula, Amalia, and Joana.
How long have you been working as a lawyer and what made you choose real estate?
I have been working as a lawyer for more than 25 years, and I decided to specialise in Real Estate Law because I enjoy the excitement and the spirit of my clients when they have decided to acquire a property in Ibiza or in Mallorca. Helping them to make their dreams and desires come true is heart-warming.
What areas do you practise in?
We specialise in tax and legal real estate, and urban law.
How long have you been working with Jason and Izabela at Fantastic Frank Ibiza?
I have been working with them for the past five years, and they really are top real estate agents: Very focused on the detail and on making the deal happen.
Do you work mostly for buyers, sellers – or is it an even mix?
It’s a real mix. I represent many buyers who have bought a property with us previously, and then, if they decide to sell it for any reason, they call us to help them with the selling process.
What are your main responsibilities?
We are involved across all stages of the buying or selling process, which I call pre-deal, deal, and post-deal.
The pre-deal is especially important as this is when we determine the most efficient structure to acquire the property – because once the property is bought, any changes in the ownership will be expensive and sometimes difficult.
The “deal” stage includes the entire conveyance process: Legal due diligence, preliminary contracts, PoA, NIE numbers, notary appointments, bank accounts, financing, and exchanging contracts before the Spanish notary among others.
The “post deal” is when we handle tax payments, registration in the Land Registry, or assistance with general house management.
Are there limitations when working with international clients?
Not really, in our team we speak English, German, Spanish and Catalan, so we cover most nationalities. The potential limitations usually come because of AML restrictions on difficult jurisdictions, but this is something quite rare.
Are there key differences between countries that make the legal process more challenging?
The majority of our transactions are carried out smoothly and without significant delays, but it is true that there are some jurisdictions (Canada, UAE or Qatar, for example) that do not adhere to the Hague Convention (this is a simplified method for the legalisation of documents). In this case, the required paperwork may delay completion.
Why is it beneficial to have a lawyer on board?
Our motto is “the reassurance of knowing the way”. The regulations and the legal system in Spain significantly differ from some other countries, and not having an expert lawyer on board may not only make the process much slower and more difficult, but also really expensive.
Are there many people who think they can ‘go it alone’?
Not many. Sometimes the client thinks that our job will be limited to accompany them to the notary office, but fortunately, they find out very soon that they need full assistance during the whole buying or selling process.
Are there any big wins you have achieved for your clients that you can share?
Yes, of course! A major win is when we can explain to them how to channel the acquisition of the property more efficiently. There are significant tax savings to be made, and we are highly specialised in international tax planning.
At what part in the buying process do you usually get involved?
We are involved in the whole process. I like to tell my clients that our service covers everything, starting when the client has found their dream house, and ending when the last utility bill has been changed under the name of the buyer.
What should a buyer or seller have prepared and ready before they contact you?
Time! I like to spend time with my clients to obtain as much information as possible to be able to offer the best possible service.
Lawyers have a reputation for being expensive – with good reason! How much should we expect to put aside for legal support when buying a property?
True! But we do not follow the 1% fee rule on the purchase price that most of the lawyers in Ibiza or Mallorca apply. Our fees are calculated upon the scope of the work, case particularities, and liability – but I can assure you that it is extremely rare that a client does not hire us because of our fees. We are very reasonable on pricing.
How do you work with real estate agents and mortgage brokers?
Really well to be fair. The real estate agent is a key point of contact for every real estate transaction: They know the market, the parties (buyer and seller), and usually have a very good relationship with the client. For me, we are on the same team.
With mortgage brokers it is pretty much the same, financing is usually a central element of the transaction that has an impact on timing and, therefore, the closer we work with the mortgage broker, the smoother the transaction will progress.
Can you give us a quick run-down of the entire buying process in a few simple steps?
Of course! In summary:
- Attain a NIE number for international clients
- Set up Power of Attorney
- Tax planning
- Due diligence
- Draft up a preliminary contract
- Anti Money Laundering
- Open a bank account and arrange financing
- Notary completion
- Tax payments
- Land registration
- Changing over of service providers
What are the trickiest moments during this time?
Usually attaining the NIE numbers, completing due diligence, drafting up the preliminary contracts, financing, and Anti Money Laundering – but it depends very much on the case.
Any other hidden costs, mistakes or surprises that we would not expect and can be avoided by hiring a good lawyer?
Of course! There are two main ones: a) tax penalties, and b) urban sanctions, including economic penalties – or even house demolitions in the worst cases!
What are the biggest challenges of your work?
Making the clients understand, and, more importantly, accept, that in Spain sometimes things do not work or progress as quickly or smoothly as in their home countries.
What do you enjoy most about your job?
I love meeting new clients and being able to help them enjoy their new properties and the incredible lifestyle that we have in Ibiza and Mallorca – the Balearic Islands are a real paradise!
How do you see the Balearic real estate market? Ibiza seems to remain popular, but is there also more interest in Mallorca and Menorca now?
The Balearic Islands have always been a safe harbour in terms of real estate investment. Even during the pandemic the property prices were not significantly affected. Needless to say, the real estate market cannot be considered as one, as every island has its own particularities – and even within the islands, every geographical area needs to be considered differently. But, generally speaking, real estate investments in the Balearic Islands are always a very good choice!
To get in touch with Ignacio Rodríguez visit www.rppandpartners.com.
To contact the Fantastic Frank Ibiza team, visit www.fantasticfrank.com or email ibiza@fantasticfrank.com. Property images of Cas Net by Sayana Cairo.
