Ireland boasts a population of 4.773 million people, and their modern knowledge-based economy is thriving. In 2017, Ireland took fifth place in the OECD EU-27, and is thought to be one of the wealthiest countries in the world. Whether you’re looking to move to Ireland or invest in property in Ireland, there’s never been a better time.
With property prices rising by 5.4% in the third quarter of 2016, the incredible growth of the Irish property bubble doesn’t appear to be slowing down anytime soon. It’s no surprise, then, that many people are weighing up the benefits of moving to Ireland. If you’re considering buying property in Ireland, we’ve put together a guide to help you.
Who can buy property in Ireland?
Generally speaking, there are no restrictions when it comes to foreigners purchasing real estate and property in Ireland. This is due to growing investment in Ireland, which favours and relies on foreign businesses. So, after you’ve found the right property for you, it is then time to make an offer they can’t refuse, and hire a solicitor. It is important to remember that the offer does not legally bind you to buy.
What happens if my offer is accepted?
Should the seller accept your offer, you then have the opportunity to arrange for a survey of the building, in order to detect any potential problems that may arise in the future. A survey of the property isn’t a requirement, but it is recommended. Your solicitor will then draft a document that will transfer the property into your name – this is called the Deed of Conveyance. The first draft is then sent to the seller’s solicitor for his approval.
Now, it is time for the vendor’s solicitor to write up a contract for the sale of the building in question. Once your solicitor has reviewed this contract and is satisfied with the terms, conditions, and title of the property, it is time to sign contracts.
If you’re looking at buying property in Ireland, it is strongly recommended to employ a surveyor to inspect a building or plot of land before you offer to buy it. The cost is dependant on the kind of survey, the value of the property and any special requirements. In Ireland, some banks, financing companies and other lending institutions will place a fixed charge on a sliding scale, in accordance to the value of the property. If the property you’re looking to buy in Ireland is over 100 years old, you may be required to have a structural report. In some instances, the valuer’s travelling expenses are added to the bill. If the mortgage is refused, the valuation costs are refunded.
How much is stamp duty in Ireland?
If you’re looking at buying a house or property in Ireland, then the main expense involved is stamp duty. This is the tax on the purchase deed payable by the buyer when the sale is closed. Stamp duty rates have fluctuated over the decades, when criteria was first changed in April 1988. In June 2000, the criteria was once again changed, and new houses and apartments with a floor area of less than 125m2 were exempt from stamp duty, there was the intention of letting them within five years of the date of purchase. In 2010, a simpler system was introduced, and this exemption no longer applied to smaller properties. The simplified system also abolished the first-time buyers exemption and consanguinity relief for the transfer of farmland between close relatives. Stamp duty in Ireland is levied on property transactions, and is paid by the buyer. The applicable stamp duty rates depend on the market value of the property at the time of purchase.
In Ireland, stamp duty is applied to all residential properties. This even includes sites with agreement to build. Stamp duty is then paid to Revenue Commissioners at the time of purchase. The current rates for Irish stamp duty is:
- 1% if the property value is up to €1,000,000
- 2% if the value of the property is over €1,000,000.
So, if you’re purchasing a property that’s worth €500,000 then you’ll pay €5,000 in stamp duty. Note that this compares very favourably with the UK; a £500,000 single property purchase would result in a £15,000 stamp duty charge, while a £500,000 second or additional property would lead to a £30,000 stamp duty charge.
Stamp duty is applied to the base price of the property before VAT is added. It is also important to mention that any fixtures and fittings such as carpets and curtains included in the purchase of the property will be taken into account when determining the stamp duty.
How much are legal fees when buying property in Ireland?
When it comes to purchasing Irish property, there’s no fixed rate of charge for legal fees. The charges for conveyancing work recommended by solicitors is negotiable – some will charge a fixed fee while others charge a percentage of the purchase price. This can be anything from 1% to 1.5%, plus 23% VAT on legal fees.
How much is tax on an Irish Property?
A key consideration if you are looking to retire to Ireland from the UK, the initial national central rate of tax on an Irish property is 0.18% of a property’s value up to €1 million. For properties over the value of €1 million, 0.25% is added onto the balance. From 1 January 2015, local authorities will have the option to pay varied LPT rates -/+ 15% of the national central rate.
Clear Treasury is one of the most trusted foreign exchange and payments companies in the UK and Ireland. With founders born in Ireland, we see the potential within the Emerald Isle and can help you if your aim is to send money to Ireland or even move there. We combine our foreign exchange expertise with a proactive approach to be our clients eyes and ears in the market, therefore removing the stress of FX for our clients. So if you are corporate or private individual looking to make move funds to or from Ireland and the rest of the world, we’re here to help – get in touch to find out how.