A 500-Year-Old Home on Spain’s Party Capital Ibiza Lists for €10.8 million
The restored property is in the oldest part of the island’s capital, a designated Unesco World Heritage Site
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A historic home in an Unesco World Heritage Site on the Spanish island of Ibiza has come to the market €10.8 million (US$11.7 million).
Dating to the 16th century, Palacio XI is in Dalt Vila—the oldest quarter in Ibiza Town, the island’s capital—which was designated a heritage site in 1999. The fortified enclave is a labyrinth of narrow, cobbled streets, ancient buildings and stunning views.
The four-storey home was acquired by the seller when it was in ruins and they embarked on a thorough restoration between 2014 and 2018, according to a spokesperson for the listing agency Charles Marlow Ibiza.
Mansion Global couldn’t identify the seller, or when or for how much they acquired the property.
Today, the house is a “blend of historic Ibiza charm and contemporary luxury,” said Tim Stacey, head of sales and rentals at Charles Marlow Ibiza. There are details like stone walls, tall beamed ceilings and grand stone arches, alongside features including an integrated sound system, comfort cooling and underfloor heating.
There’s a modern kitchen with a wine cooler, a dining room that opens out to the large main terrace, the pool area and a covered outdoor dining area, ideal for al-fresco entertaining.
There are also multiple living spaces, a roof terrace, a for-vehicle carport with EV charging, six bedrooms and “superb 360-degree views of Ibiza Town, the island, and Formentera [that] are truly breathtaking,” Stacey said.
Ibiza is considered one of the top luxury residential destinations globally, according to Knight Frank’s Prime International Residential Index, released earlier this year, which found prime property prices on the island rose 12% in 2023.
“Ibiza’s strength lies in its ability to provide an escape from metropolitan life,” said Jack Harris, a partner in Knight Frank’s International Residential team . “It’s a place where one can recharge the batteries (yoga is a staple on the island), enjoy world-class cuisine and reconnect with nature—whether on the beach or in the heart of the island’s countryside.”
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Australia’s housing market defies forecasts as prices surge past pandemic-era benchmarks.
First-home incentives can still form part of a long-term investment plan if used strategically.
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Australia’s home prices continue to grow, and while that makes them great investments, they are also some of the most unaffordable in the world.
That’s why first-home buyer schemes such as the First Home Owner Grant, the First Home Guarantee, and stamp duty concessions have become so valuable.
These programs are designed to reduce upfront costs and fast-track people into homeownership.
But the question many aspiring investors are now asking is can these schemes be used as part of an investment strategy? These government initiatives aren’t designed for investors, but they can still play a key role in your long-term investment journey if used strategically.
What the schemes actually allow
Every first-home buyer incentive in Australia is created to support owner-occupiers, not investors.
Whether it’s a cash grant, reduced deposit requirement, or a stamp duty discount, the catch is always the same in that you must live in the property for a set period of time. For example, the First Home Owner Grant often requires you to live in the property for at least six to twelve months, depending on the state.
The First Home Guarantee allows you to purchase with just a 5 per cent deposit without paying lenders’ mortgage insurance, but again, you’re required to live in the property for at least one year.
Likewise, state-based stamp duty concessions are only available for properties intended as a principal place of residence. If your intention from the outset is to buy a property solely for rental income, you won’t be eligible. However, if you’re open to living in the property initially, then transitioning it into an investment, there’s a path forward.
A strategy that works
Rentvesting has emerged as one of the most practical ways for first-time buyers to take advantage of these schemes while also laying the groundwork for a property portfolio.
The concept is simply, buying a property in an area you can afford (using the first-home buyer schemes to assist), live in it for the minimum required period, and then rent it out after fulfilling the occupancy condition.
This approach lets you legally access the benefits of first-home buyer schemes while building equity and entering the market sooner. Instead of waiting years to save a full 20 per cent deposit for an investment property, or getting priced out altogether, you get your foot in the door with reduced upfront costs.
Once you’ve satisfied the live-in requirement, the property can become an income-generating asset and even serve as collateral for your next purchase.
What to look for in a rentvestment property
If you plan to eventually convert the property into an investment, you need to think beyond your short-term living experience. It’s essential to buy a property that performs well both as a home and as a long-term asset.
That means looking at key fundamentals like location, rental demand, and growth potential. Suburbs with strong infrastructure, access to employment hubs, good transport links, and low vacancy rates should be high on your list.
A balanced price-to-rent ratio will help ensure manageable holding costs once the property transitions to an investment.
Established low-density areas often outperform high-rise apartment developments that flood the market with supply and limit capital growth. And ideally, your property should offer scope for future improvements, whether that’s a cosmetic renovation, granny flat addition, or potential to subdivide down the track.
Mistakes to avoid
There are a few common missteps that can undermine this strategy. The first is selling too soon. Some grants and stamp duty concessions include clawback provisions if you offload the property within a short period, which could see you lose the benefits or even owe money back.
It’s also a mistake to let the lure of a government handout sway your purchasing decision. A $10,000 grant doesn’t justify compromising on location, growth prospects, or property fundamentals.
Another pitfall is failing to consider the financial impact once the property becomes an investment. Repayments, tax treatment, and outgoings may change, so it’s important to stress-test your position from day one.
Lastly, beware of buying into oversupplied areas simply because they’re marketed to first-home buyers. Not all new builds are good investments. If hundreds of identical properties are being built nearby, your long-term growth could be seriously limited.
With the right approach, your first home can be the foundation for an entire property portfolio. It starts with using available government support to lower your entry cost.
From there, you occupy the property for the required time, convert it to an investment, and leverage the equity and rental income to fund your next purchase.
Many of the most successful investors today began with a single, strategically chosen property purchased using these exact schemes. By buying well, you can turn your first home into the launchpad for long-term wealth.
Abdullah Nouh is the Founder of Mecca Property Group (MPG), a buyers’ advisory firm specialising in investment opportunities in residential and commercial real estate. In recent years, his team has acquired over $300 million worth of assets for 250+ clients across Australia.
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