Navigating the property market can be tricky, and you are likely to have a host of different questions depending on your situation – whether purchasing a second property, a residential home, or a rental investment. At Irwin, Kilcullen & Co., we are here to help you every step of the way. This is our complete guide to buying a property in Ireland – and if you have any more questions, please do not hesitate to get in touch.
Buying a Residential Property
For most people, their first experience of buying property will come when they purchase their own home. It can be a very exciting but potentially confusing time, with a huge amount of important information to fathom. Here’s a step-by-step breakdown of the process:
- Set your budget and get a mortgage offer in principle. It’s important that you make a careful assessment of how much you have to spend, so that you can meet any mortgage payments without trouble. Talking to your lender and establishing an offer in principle can also give you the confidence to know that you will be able to get the loan you need, when it comes to making offers on properties.
- Find your property! Take the time to do your research, make sure you know about the area and investigate comparable recent sales prices, to ensure sellers are asking a fair price. Although some sales in Ireland are completed through auctions (which involve a different process), most are done through private treaty, usually with the seller represented by an estate agent. Once you have made your choice, you need to put in an offer. If the offer is accepted, you will then need the help of a solicitor to complete the conveyancing process. This is a service Irwin, Kilcullen & Co. can provide.
- The conveyancing process will vary slightly between transactions, but in general, it will follow this pattern. You will pay a booking deposit to the estate agent you are purchasing through. Until the contracts are signed, this is refundable.
- Surveys are carried out. Your mortgage lender will require a valuation, but you can also choose to have more in-depth surveys completed, for instance should you want to check the structural integrity of the property.
- Once the value has been formally established, your mortgage can be officially agreed.
- Solicitors will then perform searches, to guarantee there are no other issues affecting the property or the land it is on, which could affect your purchase.
- Time to pay the deposit – usually at least 10% of the purchase price. The Contract for Sale is signed.
- Requisitions on Title are raised – this is a standard set of questions confirming exactly what is to be included in the sale, such as whether you are also buying any fixtures and fittings.
- The Deed of Conveyance – also known as the Deed of Transfer – is drawn up and approved
- The day on which you become the legal owner finally arrives – this is known as Closing Day. Final searches will be performed on this day, to double check there are no judgements outstanding against the seller.
- You will then need to put a home insurance policy in place.
- The mortgage is then used to give the balance of the sale price to the seller, while you are given the keys to your new property.
- Stamp duty is paid, and the Title Deeds are registered, with either the Land Registry or the Registry of Deeds.
Buying a Second Property
The process for buying a second property in Ireland follows the same steps as described above, but with a couple of important differences. If you plan to use a mortgage to make your purchase, you will need to establish how much you can borrow. Your current assets will be taken into consideration, so you will need an up to date valuation of any properties you already own. Additionally, whether you are purchasing a second home or a rental investment, you will not qualify for first time buyer status. This means you will need at least a 20% deposit. It doesn’t matter where else in the world your first property is – you will still be disqualified from first time buyer provisions.
A benefit of purchasing a second property in Ireland is that stamp duty rates do not change (whereas in many other countries, rates on additional properties are higher). So regardless of how many properties you own, the stamp duty rates are fixed (with a few exceptions) at:
- 1% on properties valued up to € 1 million.
- 2% on the amount over € 1 million.
Buying a Rental Property
As with any investment, purchasing a rental property needs to be carefully considered. As well as paying stamp duty, your rental income could be subject to capital gains tax, income tax, pay related social insurance (PRSI) and universal social charge (USC). As a landlord, you will need to abide by strict rules; and your mortgage will be buy-to-let, which generally involves less favourable terms than residential loans.
However, with a firm plan in place, it is possible to make a wise investment and build for the future using rental properties as an additional income or pension plan. Doing thorough research is important, as is selecting property in an area where returns on rents are good, but property is still within your budget. Many of the additional costs of a rental property are tax deductible, so with some forethought it is possible to balance the books and gain a valuable asset for the future.
Buying an Irish Property as a Non-Irish Citizen
Although there are many non-Irish citizens residing in Ireland, the right to remain is not linked to property ownership. Non-Irish citizens are able to buy property here, but should check that they have a secure right to remain before investing. Mortgage lenders are less likely to support an applicant whose visa has a limited time remaining on it. However, passport holders from the UK, EU, EEA and Switzerland are able to reside in Ireland without restrictions, so shouldn’t face additional complications when buying Irish property.
Buying Irish Property as a Non-Resident
There are many reasons buying property in Ireland is an attractive option, even if you do not live here. Rental yields are high, while house prices remain relatively low, so it can be a rewarding investment opportunity. The good news is that non-residents are perfectly able to buy property in Ireland. However, as noted above, property ownership does not automatically give you leave to remain, and so non-EU / UK / Swiss nationals will face additional restrictions when visiting the country. The Immigrant Investor Programme (IIP) can offer another option to those with a personal net worth of more than € 2 million. We would advise those exploring these options to seek further legal advice from solicitors such as ourselves, before committing their time and money.
Buying Commercial Property
Commercial property purchases in Ireland are subject to different rules than those outlined above for residential purchases. There are additional steps to be taken into consideration, such legal due diligence and accounting due diligence. There will be extra costs, such as VAT. These extra considerations necessitate the use of a specialist commercial property solicitor. Here, Irwin, Kilcullen and Co. can help – we have a long track record of providing excellence in both domestic and commercial property transactions.
Thinking of buying property in Ireland? Contact Irwin, Kilcullen and Co. Solicitors today – conveying excellence.