“The best investment on earth is earth”, said investor and philanthropist Louis Glickman. Whether you’re considering buying a new home, a holiday residence, a rental or business property, Ireland holds many exciting possibilities.Ireland’s real estate market is at a turning point. After the 2008 economic crisis, house prices plummeted throughout the country, but they have risen again over the past few years as the country’s economy and job market improves. 2018 saw the property market begin to stabilise, and a boom in private construction means there are now more homes available to buy.
Buying property in Ireland can seem a lengthy and complex procedure for those unfamiliar with the system. While there are no restrictions on nationality when purchasing property in Ireland – you do not need to be an Irish or EU resident – bear in mind that property ownership does not come with residence rights, and so you will need to consider these separately. Here’s all you need to know to navigate the process and secure the property of your dreams.
The areas you consider will vary according to whether you plan to reside in the property yourself or are buying to rent the property out. Dublin has by far the highest rental yields and largest community of renters in the country. It’s also the most expensive zone – in most parts of Dublin, you will need an annual salary of over €150,000 per year to pay a mortgage for an average-sized home. South Dublin is the most expensive part of the capital, while in the West County it’s still possible to find somewhere more reasonably priced. The more affordable parts of Ireland to buy a home include Longford, Roscommon, Donegal, Kerry and Cavan.
When house hunting, make sure you bring a checklist of your needs and preferences and that you ask as many detailed questions as possible. You will want to determine the type of interest available too. Properties can be sold with freehold or leasehold interest in Ireland. Freehold means the property belongs to the owner forever and gives the owner full rights over the property and the land on which it’s built. Leasehold means owning only the building, rather than the land it is on, and ownership is for a fixed number of years. This is common when buying apartments, which usually have long leaseholds – often for 999 years, although they can be shorter. Leaseholds also have other conditions attached; you will pay a ground rent, possibly a service charge to a management company, and may be bound by rules around whether animals are permitted, floor coverings, noise or décor on balconies.
In Ireland, sellers have no legal obligation to disclose defects in a property. Even if everything seems fine at a viewing, it’s therefore advisable to pay for a professional survey of the property to highlight defects, structural issues or repairs needed before going any further – especially if it is an older property. You should also check the property’s Building Energy Rating (BER), which tells you how energy efficient the home is, and allows you to factor energy costs (or home improvements to improve energy efficiency) into your final calculations. It’s also a good idea to look at whether the property is in a High Radon Area via the Environmental Protection Agency, and if so, to ask whether radon barriers have been installed.
The most common methods of buying and selling properties are private treaty sales and public auctions.
Private treaty sales: Most homes for sale privately are listed with estate agents, who act as intermediaries between the buyer and seller. Once you’ve determined the areas or regions that interest you, register with all the local estate agents so they can contact you when they have something suitable for viewing. Remember that in Ireland, estate agents are usually acting in the seller’s interest, as it is the seller who pays the estate agents’ fees. Estate agents will only show you properties they have listed, not those listed by other agents. That means it’s advisable to do a large part of the searching yourself, in local newspapers and on property websites such as myhome.ie, daft.ie, property.ie, gumtree.ie and rent.ie. You can create a search alert on these websites, so that you receive an email every time a property that meets your search criteria is listed.
Private treaty sales involve making an offer to the seller or their estate agent, using the asking price as a rough guide – it’s often advisable to offer less than the asking price to start negotiations. If your offer is accepted, you’ll begin the legal process, which consists of obtaining a formal mortgage approval, if necessary; drawing up and signing contracts with solicitors; paying a non-refundable deposit to secure the sale; and arranging to pay stamp duty and registration fees. Until the contracts are signed, the buyer or seller can change their mind. While you are not obliged to use a solicitor to buy property in Ireland, you are advised to do this. The solicitor will check all contracts and carry out requisitions on title, which involve raising queries about the property and title to ensure you are aware of details such as which fixtures and fittings are included in the sale, and whether there are any plans for construction nearby that would interfere with your use of the property (roads or railways, for example).
Public auctions: Public auctions are one-off and take place at a specific date and time. This means you should prepare in advance for any properties you plan to bid on. Arrange a survey of the property, ask your solicitor to check the contract for sale, and obtain formal mortgage approval, if needed. If you are successful in bidding for a property at a public auction, you will need to immediately sign the contract for sale and pay a deposit. The seller or auctioneer will set a reserve figure for the property at an auction – if no bids equal to or greater than the reserve figure are made, the property will be withdrawn. The seller has the right to withdraw the property from auction at any time before or during the auction.
If you plan to seek a mortgage, you will need to obtain formal mortgage approval. This usually requires purchasing mortgage protection insurance and home insurance, so factor these into your costs. Your mortgage provider can arrange these, but you should shop around for the best deal. You may be able to get financing from an Irish bank or mortgage broker, even if you do not reside in Ireland, although this can be difficult. Non-resident buyers may be classed as foreign investors and need to pay a higher deposit on the home. While the deposit is usually 10% of the purchase price (and the mortgage makes up the rest), foreign buyers can be asked to pay 30 to 50% upfront.
If you live outside the Eurozone, you will also need to consider currency exchange costs, whether you are a cash buyer or plan to finance part of the purchase with a mortgage. When planning the money transfer, look at rates for specialist currency exchange companies, as well as banks, as they may be cheaper.
Other costs you will need to factor in include legal fees (these vary but can be up to 1.5% of the property price plus VAT), fees for registering your property in the land or deeds registry, and stamp duties (1-2% for residential properties, and 6% for non-residential properties).
There’s a lot to consider, but it pays to be prepared. Your new home or investment on the Emerald Isle will be worth the effort.
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