Italians are Ibiza’s second-largest international market, and an Italian owner meets one tax that no other buyer does: IVIE. Italy sent 968,861 passengers to Ibiza airport in 2025, more than any country except the UK, and Italians made 5.13% of all foreign home purchases in Spain in the second quarter of 2026. Italy taxes its residents on property abroad through IVIE, a yearly charge on the villa’s value, and the Spanish wealth tax can be set against it. This guide is for Italian buyers of prime homes on the island.
Italy-Ibiza passengers, 2025
IVIE on property abroad
After which Italy doesn’t tax the gain
No visa needed
Last updated: October 2026
By: Alexander Thornbury
What does Spain charge an Italian owner?
The rates any EU owner pays, set out below. For an Italian owner the line to watch is the wealth tax, because it does double duty: the Balearics charge it in full above EUR 700,000, and Italy then lets you deduct it from IVIE. Our Ibiza property tax guide covers each Spanish charge.
| Spanish tax for an Italian owner (2026) | Rate |
|---|---|
| Transfer tax on a resale | 8% to 13% in Balearic bands: EUR 600,000 on EUR 5M |
| New build | 10% VAT plus 2% stamp duty from EUR 1M |
| Home kept for own use | 19% of a notional 1.1% of cadastral value |
| Rental income | 19% of the net rent |
| Gain on sale | 19%, with 3% of the price withheld by the buyer |
| Wealth tax | Spanish assets above EUR 700,000: about EUR 53,500 a year on EUR 5M |
How does IVIE work on an Ibiza villa?
It is Italy’s yearly tax on property its residents own abroad, at 1.06% of the property’s value, in proportion to your share and the months you owned it. On a EUR 5M villa that would be EUR 53,000 a year before any credit. You declare the villa in the RW section of your Italian return, which also serves Italy’s monitoring of foreign assets.
The saving grace is the credit. Wealth taxes paid abroad on the same property for the same year can be deducted from IVIE, and the Spanish wealth tax is one of them. Because the Balearics charge wealth tax in full, an Italian owner with substantial Spanish assets can find that the Spanish wealth tax covers much or all of the IVIE. Have an adviser in each country run the numbers on your actual holdings before you buy.
| Tax on the Ibiza home | Spain | Italy (if Italian-resident) |
|---|---|---|
| Annual tax on the property | Wealth tax above EUR 700,000; IBI | IVIE at 1.06%, less the Spanish wealth tax |
| Rental income | 19% of net rent | Income tax, with credit for the Spanish tax |
| Gain on sale | 19% | Taxed only if sold within 5 years, with credit |
| Inheritance, spouse and children | 100% Balearic relief | 4% above EUR 1M per heir |
How does Italy tax rent and gains?
Rent through income tax, with credit for Spain. An Italian resident declares foreign rental income in Italy, and Italy credits the tax already paid in Spain, so in practice you top up from the Spanish 19% to your Italian rate. Spain taxes first because the property is there.
Gains depend on how long you’ve owned the villa. Italy taxes a private gain on property sold within five years of purchase, and doesn’t tax it after that. Spain’s 19% applies either way. So an Italian owner who holds for more than five years pays only the Spanish tax on the gain, and one who sells sooner pays the Italian tax too, with credit for the Spanish.
How does inheritance work for an Italian family?
Lightly, on both sides. On the Spanish side, close family have paid no Balearic inheritance tax since July 2023, when a 100% relief came in, and it applies even when the deceased lived in Italy. Italy taxes a resident’s worldwide estate, but for a spouse or children the rate is 4%, and only on the value above EUR 1M per heir.
So a villa left to a spouse and two children can pass with modest tax or none, depending on the rest of the estate. The EU Succession Regulation decides whose law governs: that of your habitual residence at death, or your nationality if the will says so, and the choice matters because Italian and Spanish rules on reserved shares for heirs differ. Make the wills consistent in both countries.
Can you move to Ibiza?
Yes, freely. Italian citizens need no visa: you register as a resident once you’ve been on the island for three months. The closure of Spain’s golden visa in April 2025 is irrelevant to an Italian passport holder.
Moving swaps one system for the other. Spend more than half the year in Spain, or move your economic life there, and Spain taxes your worldwide income and wealth, with a EUR 3M Balearic wealth-tax allowance, while IVIE stops once you are no longer Italian-resident. Our residency guide explains the switch.
What should an Italian buyer check?
The IVIE and wealth-tax interaction first, with an adviser who works across both systems. Then the island-specific points: whether the house and pool are fully licensed, where the water comes from, and, for a letting plan, an existing tourist registration, since no rustic-land home built after 1956 can be let to tourists from August 2025.
For the steps of the purchase, see our buying guide; for the areas, our prime areas guide; and for the market, our main Ibiza guide.
Key takeaways
- Italy is Ibiza’s second-largest international market: 968,861 passengers in 2025.
- Spain taxes Italian owners at EU rates: 19% on net rent, notional income and gains.
- IVIE charges 1.06% a year on the villa’s value, less the Spanish wealth tax on it.
- Italy taxes the gain only if you sell within five years.
- Inheritance is light: 100% Balearic relief, and 4% in Italy above EUR 1M per spouse or child.
- EU citizens move freely; becoming Spanish-resident ends IVIE.
Frequently asked questions
Can Italians buy property in Ibiza freely?
Yes. EU citizens face no restrictions. You’ll need a Spanish tax number, the NIE, and should appoint an independent lawyer.
What is IVIE?
Italy’s yearly tax on property its residents own abroad, at 1.06% of the value, in proportion to ownership share and months held. It is declared in the RW section of the Italian return.
Can I deduct Spanish taxes from IVIE?
Yes, wealth taxes paid abroad on the same property for the same year can be deducted, and the Spanish wealth tax is one of them.
Do Italian owners pay Spanish wealth tax?
Yes, above EUR 700,000 of Spanish assets. About EUR 53,500 a year is due on EUR 5M, and that amount can then be credited against IVIE.
How is rental income from an Ibiza villa taxed for an Italian resident?
Spain taxes 19% of the net rent. Italy then taxes it as income, with credit for the Spanish tax.
Does Italy tax the gain when I sell my Ibiza villa?
Only if you sell within five years of buying. Spain taxes the gain at 19% in every case.
What inheritance tax applies to an Ibiza villa for an Italian family?
For close family, the Balearics give 100% relief. Italy taxes a resident’s worldwide estate at 4% for a spouse or children, on the value above EUR 1M per heir.
Do Italians need a visa to live in Ibiza?
No. Italians, as EU citizens, live in Spain by right and register once they’ve stayed three months.
Does IVIE still apply if I move to Ibiza?
No. IVIE applies to Italian residents. Once you are tax-resident in Spain, Spanish rules apply instead.
How many Italians travel to Ibiza?
Italy was Ibiza airport’s second-largest international market in 2025, with 968,861 passengers.
What tax does an Italian buyer pay to buy in Ibiza?
Nothing different from other buyers: 8% to 13% Balearic transfer tax on a resale, or 10% VAT and 2% stamp duty on a new build from EUR 1M.
Sources
- Agenzia delle Entrate – Italian Revenue Agency
- IVIE explained: 1.06% rate, calculation and credit for foreign wealth taxes
- BOE – Non-Resident Income Tax Act, Royal Legislative Decree 5/2004
- BOE – Balearic Legislative Decree 1/2014 (transfer tax, wealth tax, inheritance relief)
- BOE – Inheritance and Gift Tax Act, Law 29/1987 (non-resident heirs)
- EUR-Lex – EU Succession Regulation 650/2012
- Aena – Ibiza airport 2025, passengers by market
- Colegio de Registradores – foreign buyers by nationality, Q2 2026
Figures current at October 2026. Take Italian and Spanish advice before you buy.
About the author
Alexander Thornbury is a published author who writes on international property, tax and residency for high-net-worth buyers across Europe. His work focuses on the practical mechanics of cross-border purchase: what a buyer actually pays, owes and signs. More at alexanderthornbury.com.