Why the Spanish military permit is still important for EU foreigners!

Did you know that a Canadian citizen can easily buy a penthouse apartment in downtown Ibiza, but that the same Canadian can only buy a finca a few kilometers inland from the island if the Ministry of Defense has expressly approved the project?

The fact that an EU foreigner can only acquire undeveloped land (“suelo rustico”) on Ibiza after obtaining a military permit is due to a law dating from 1975 and has concrete effects on the drafting of property contracts. As the Balearic Islands belong to the Spanish military zone ( zona militar), the Spanish Ministry of Defence ( Ministerio de Defensa) has a say in the settlement of EU foreigners on Ibiza. Obtaining the military permit is a mandatory requirement for the civil validity of the purchase contract. If the military permit is not available at the time of the notarisation, the notary will refuse to sign the deed of sale. Registration of the new owner in the land register will thus be impossible without permission.

This situation affects around 1,500 municipalities throughout Spain, which are located in zones defined in the 1975 law, the so-called “areas with restricted access for foreigners”. The restrictions apply exclusively to undeveloped land, but not to developed building land (“suelo urbano”).   After Spain’s accession to the European Community, citizens of the present European Union were put on an equal footing with Spaniards and have since been exempted from applying for a military permit from the Ministry of Defence. The same applies to countries outside the EU but which are part of the Schengen area (Iceland, Norway and Switzerland). The regulation also affects legal persons:  For example, if a Spanish limited liability company (“Sociedad Limitada”) wants to acquire a property, no more than 50% of the shares may belong to natural persons from outside the EU or the Schengen area. The question is currently completely open as to what will apply to British citizens in the future in the event that the UK leaves the EU (“Brexit”). In the absence of an agreement with the EU, will an English buyer in future have to apply for a military permit if he intends to purchase an undeveloped plot of land in Ibiza?

In order to apply for a military permit, an Australian, American or Russian prospective buyer should therefore ensure that, in the case of a private preliminary contract for a property in the countryside, he/she agrees with the seller on the longest possible period of time until the notarial recording. Unfortunately, in individual cases it cannot be predicted how quickly the EU foreigner will obtain his military permit: depending on the size of the property, the permit procedure can take 4 months.

As a rule, the following documents must be submitted to the authorities:
– A certified copy of the passport of the applicant
– A police clearance certificate from his home country
– A topographic map showing how far the property is from the nearest military base
– The exact description of the real estate according to the land registry and cadastral office

To sum up, I do not think it makes sense today that there are more than 1,500 municipalities in Spain which, for reasons of national security, are considered areas with restricted access for EU foreigners. The purchase of undeveloped land in Ibiza should not be subject to the control of the Ministry of Defence. If necessary, a differentiated authorisation procedure could be introduced based on objective and predictable criteria.