Thinking of Buying a Property in Ireland? This is Everything You Need to Know
If you’re thinking of buying a property in Ireland, then you likely have a number of questions that you’d like answered first. What’s involved in buying a property? Can you buy property in Ireland if you’re not a citizen? And what are the implications of buying a second property? We answer these questions and more in our complete guide to buying a property in Ireland.
If you have any further questions that are not answered here, or you need a property solicitor to help you with a residential or a commercial property purchase, please contact us today.
The complete guide to buying a property in Ireland
In this guide to buying a property in Ireland we cover the following topics:
- Step by step guide to buying a residential property
- Buying a second property in Ireland
- Buying a rental property in Ireland
- Buying a property in Ireland as a non-Irish citizen
- Buying a property in Ireland as a non-resident
- Buying a commercial property in Ireland
Step by step guide to buying a residential property
The first step to buying a property is to figure out your budget. If you are buying a property with a mortgage, then it is prudent to get an offer agreed in principle. That way, you know exactly how much the bank is willing to lend you. Also, it will avoid any disappointment later down the line, as you can feel confident that the lender will formally approve your mortgage when the time comes.
The next step is to find a property to purchase. Most property sales in Ireland are done by way of a private treaty sale. This is when the seller puts the property on the market, usually with the help of an estate agent. You can also buy property at public auction, although the process is slightly different. Once you have found your dream property, you need to put in an offer. If this offer is accepted by the seller, you can proceed with the conveyancing process.
At this stage, you need to instruct a property solicitor – such as one of the property solicitors from the team here at Gibson & Associates. Your solicitor will handle the remainder of the process for you. Every property transaction is a little different, but typically, you can expect the following steps to occur:
- You pay a booking deposit – this is a fee paid to the estate agent. It is refundable until the contracts are signed.
- Surveys are performed – your mortage lender requests a valuation survey to confirm the value of the property. You can also request more detailed surveys, such as a structural survey, to ensure any defects are identified.
- Your mortgage is approved – after the valuation survey your mortgage is formally approved.
- Searches are carried out – searches are performed to check there are no additional issues that may impact your decision to proceed with the purchase. Any queries can be raised with the seller’s solicitor.
- The Contract for Sale is signed – you and the seller sign the Contract for Sale and you pay the deposit (which is usually a minimum of 10% to 20% of the purchase price).
- Requisitions on Title are raised – a standard set of questions called ‘Requisitions on Title’ are sent to the seller’s solicitor. This confirms what fixtures and fittings are included in the purchase price.
- Deed of Conveyance is drafted – a Deed of Conveyance, also known as a Deed of Transfer, is drawn up and approved.
- Closing day searches are performed – on closing day (the day on which you become the legal owner) further searches are carried out to check there are no judgements against the seller.
- Home insurance is put in place – you put a home insurance policy in place.
- The mortgage is drawn down – the balance of your mortgage loan is drawn down and the sale price is given to the seller. You are then given the keys to the property.
- Stamp Duty is paid – any stamp duty that is due is paid.
- The Deeds are registered – the Title Deeds are registered with either the Land Registry or the Registry of Deeds.
Buying a second property in Ireland
If you already own a property, you might be in a position where you would like to buy an additional property – whether as a second home or as a rental investment.
The process of buying a second property is exactly the same as the one described above. The main difference is that you are not considered to be a first-time buyer. This means that you must have at least a 20% deposit. It does not actually matter where in the world you own (or owned) your other property. You may have a property in the UK, Canada or the United Arab Emirates. Either way, you do not qualify for first-time home buyer status.
Other countries impose tax levies on those who own more than one property. This is not the case in Ireland. Stamp duty is not higher if you are buying a second property. There are some exceptions to the rule, but the stamp duty rates are set at:
- 1% on the first €1 million
- 2% on the amount over €1 million
If you plan on buying a second property in Ireland with a mortgage, you will need to check exactly how much you can borrow. Your assets will be taken into consideration, so you will need an up-to-date valuation of your current property (or properties).
Buying a rental property in Ireland
Buying a rental in Ireland can be an excellent investment opportunity. But as with any investment, there are a number of factors to consider before parting with your money.
On the downside, you will have to pay stamp duty and other taxes. If you are resident in Ireland, your rental income could be subject to income tax, capital gains tax, universal social charge (USC) and pay related social insurance (PRSI). You will likely need a buy to let mortgage, which typically have less favourable rates than residential mortgages. Also, there are strict rent rules that you must abide by.
On the upside, a decent income can be generated from buying a rental property in Ireland. Tenant demand for long-term lets is high in certain areas, particularly in central Dublin. With the right planning, a rental income can outweigh any expenses, many of which are tax deductible anyway. Buying a rental property in Ireland also provides future security, with many people using it as a pension plan.
In fact, buying property as a pension fund in Ireland is a popular investment option. Unlike a pension fund, a property is a tangible asset that can be sold quickly to generate funds when needed. If you buy now and pay the mortgage off, you will have a valuable nest egg, ready for your retirement. Of course, this all depends on making wise investment decisions. If you get it right, buying a property as a pension fund in Ireland can be very lucrative indeed.
Buying a property in Ireland as a non-Irish citizen
Lots of people living in Ireland are not actually Irish citizens. So where does that leave you if you are here on a working visa or as a permanent resident? What are the rules around buying property in Ireland as a non-Irish citizen?
The good news is that you are allowed to buy property in Ireland, even if you are not an Irish citizen. The bad news is that the right to remain in Ireland is not linked to home ownership. If you are a permanent resident, you can feel confident of your ability to remain in the country. Mortgage lenders will also be satisfied that you plan to stay in Ireland in the long-run. However, if your visa is due to expire soon, then your mortgage options may be limited. Also, if your visa is not successfully renewed, you will not be entitled to live in your property full-time.
There are some exceptions to this rule. Indeed, passport holders from the UK, EU, EEA and Switzerland can live in Ireland without any restrictions. If you are from one of these countries, you can buy a property in Ireland and reside in the State for as long as you wish.
Buying a property in Ireland as a non-resident
But what about if you are not actually living in Ireland? What do the laws say about buying property in Ireland as a non-resident?
Again, you are allowed to buy property in Ireland, even if you do not live here. You might want to purchase a property in the State for personal reasons – perhaps because your child is student here. Or you might want to invest in the Irish property market. This is an attractive proposition for many, as buying costs are moderate in Ireland yet rental yields are high. This, coupled with low interest rates and favourable tax rates for non-residents, makes for an excellent return on investment.
There is no limit to the number of properties you can buy in Ireland as a non-resident. Certain mortgage lenders also have products aimed specifically at non-resident property buyers.
However, as mentioned above, home ownership is not linked to the right to reside. Passport holders from the UK, EU, EEA and Switzerland are not subject to any restrictions. But if you are a non-EU/EEA/Swiss citizen, then you cannot live in Ireland full-time, even if you buy a property in the country. You can, however, visit on a tourist visa for a maximum of 90 days.
Alternatively, you might wish to apply for the Immigrant Investor Programme (IIP). This is available to individuals with a personal net worth of at least €2 million. If you meet the eligibility criteria, you have the option of investing €2 million into one (or a number of) Real Estate Investment Trusts listed on the Irish Stock Exchange. In return, you can your nominated family members are given a two year Irish visa, which can then be renewed for another three years.
Legal advice for non-Irish residents/citizens who wish to buy property in Ireland
If you are a non-Irish resident or citizen wanting to buy property in Ireland, please contact us at Gibson & Associates. We have a dedicated team of property solicitors AND a specialist team of immigration solicitors. This comprehensive service means we can offer expert legal advice those who want to invest in the Irish property market, yet do not have the security of Irish citizenship.
Buying a commercial property in Ireland
The above advice relates to residential property in Ireland. There are different rules when buying a commercial property in Ireland.
The process of buying a commercial property involves additional steps, such as legal due diligence and accounting due diligence. You may also be liable for VAT and other hidden costs. If you intend to rent the premises, there will be further legal implications involved in the drawing up of a commercial lease.
Because of these differences, it is vital that you instruct a specialist commercial property solicitor when buying a commercial property in Ireland. As with any property purchase, adding commercial premises to your portfolio can be highly advantageous – but only if you make the right investment decision. Our solicitors can work in your best interests, uncovering any pitfalls that could work against you.
Contact us now
It’s well known that buying a property is one of the most stressful things that you can do in life. Our solicitors make the process as easy as possible, offering expert advice and guidance at every stage. We can advise you on any additional implications of buying a property in Ireland, including immigration matters.
Complete our online enquiry form, or phone us on 01 872 3143 today.
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