In Ibiza, most purchase problems are not signed at the notary’s office: they are signed earlier, in a reservation form drafted by the agency or in a two-page deposit contract nobody read calmly. The Spanish process — reservation, deposit contract, deed, registration — is simple to list and easy to ruin, especially when the buyer is foreign, the property has planning history and a tourist licence is part of the deal. Here is the mechanism, and here is where it is won or lost.
The reservation: the document that looks harmless
The circuit usually starts with a reservation document and a holding deposit of a few thousand euros, often retained by the agency itself. Treat it as what it is: a contract. It must state what happens to the deposit if the deal stops, on which grounds it is recovered — an unfavourable planning check should always be one of them — and by when the deposit contract will be signed. Signing reservations that bind you to buy “as is” before anything has been reviewed is the market’s most expensive opening mistake.
The deposit contract: not all arras are equal
The contrato de arras is the centrepiece. Penitential arras under article 1454 of the Civil Code allow withdrawal: the buyer forfeiting the deposit, the seller returning it doubled. Confirmatory and penal arras do not allow withdrawal, and case law requires the penitential nature to be agreed clearly: ambiguous arras are read as a mere advance payment, and the party who thought they could walk away discovers they can be sued for performance. In an Ibiza purchase the arras must also carry the fine work: conditions precedent on financing, on obtaining or renewing the habitability certificate, on registry, cadastre and planning verification, and on the effective transfer of the tourist licence where it is part of the price; realistic deadlines for notaries and town halls saturated in season; and a clear allocation of taxes and costs.
The deed: the day of details
The sale is executed before a notary, in practice chosen by the buyer, who pays the bulk of the bill. The signing brings documented means of payment, charges cancelled or retained, the seller’s statements on the planning and tenancy situation, and the withholdings that apply: if the seller is non-resident, the buyer must withhold 3% of the price and pay it to the tax authority on account of the seller’s gain, and make sure the municipal capital-gains tax is paid, since the buyer can end up liable for it. A foreign buyer needs an NIE and, usually, a Spanish bank account; if travelling is not possible, a notarial power of attorney — granted in Spain or apostilled — solves the signing.
After completion
The deed is filed for tax and registered at the Land Registry; registration is not mandatory, but not registering means giving away legal protection. Then come the cadastral ownership change, the transfer of utility contracts — where the habitability certificate reappears — and, where there is tourist operation, notifying the licence transfer in time.
Frequently asked questions
Does the agency’s reservation oblige me to buy?
It depends on its wording: it can be a mere option or an enforceable pre-contract. That is why it is reviewed before signing, not after.
Can I withdraw after signing the arras?
Only if they are penitential, and at the agreed price: losing the deposit or returning it doubled. With confirmatory arras, the other party can demand performance.
Can I sign without understanding Spanish?
Yes, with an interpreter at the notary’s office or through an attorney-in-fact. What matters is understanding the contract beforehand, not translating it on signing day.
How long does the whole process take?
Between reservation and deed there are usually one to three months, driven by financing and verifications. Deadlines are negotiated: do not inherit them from the agency’s form.