Buying a House in Ireland
Buying a house in Ireland? Whatever your reason to buy a house in Ireland, you first need to do your homework.
Buying a House in Ireland Checklist
To be considered a serious house buyer you need to have a checklist and ensure you are prepared. The housing market in Ireland is extremely competitive because demand exceeds supply. Many people are lured by idyllic locations in Ireland to escape major cities, and foreigners can get more value for money in Ireland compared to other countries. The most expensive cities to buy a house in Ireland are Dublin, Cork and Galway, while prices in areas such as Cavan, Donegal, Mayo, Roscommon, Leitrim, Sligo and Longford have increased more slowly (source: Irish Examiner).
Be a Prepared Purchaser
Essential preparations for buying a house in Ireland include:
Having your finances ready, either cash or mortgage
- Appoint a local conveyancer (look at the Law Society)
- Appoint a surveyor
- Set aside a budget for searches (when you get quotes from conveyancers their fees will reflect the cost of searches)
- Set aside a budget for stamp duty (normally 1% of the purchase price but the percentage varies according to the price of the property)
- Set aside a budget for registration of deeds
- Set aside a budget for insurance costs (home insurance and mortgage protection insurance if applicable)
- Set aside a budget for eventual fixtures and fittings excluded from the sale you may interested in purchasing
- Set aside a budget for renovation and, if possible, get one or more quotes from builders.
The Citizens Information website has plenty of useful information if you are a first-time buyer in Ireland.
In this article the terms ‘solicitor’ and ‘conveyancer’ are used interchangeably—the difference between the two terms is that the second is a solicitor specialising in property transactions.
The Lure of Rural Ireland
Finding a Property
House Renovations Are Big Projects
Buying a House in Ireland for Cash
Considering that the property market in Ireland is extremely competitive, you have a better chance of success if you are a cash buyer. The bottom end of the market made of the cheapest houses available for sale tends to be dominated by investors who can buy cash. If you are a first-time house buyer with a limited budget but can buy cash instead of getting a mortgage, you can find some good deals. However be prepared to be outbid by investors or other buyers with a bigger budget than yours and, if successful in your bidding, do a fair amount of renovation work.
Some estate agents will require proof that you have the available funds before accepting your offer on a property. An electronic copy of your bank statement should be enough but check with the estate agent first.
Buying a House in Ireland Costs
Stamp duty on properties in Ireland is 1% for properties valued up to €1 million and 2% above that. Stamp duty is a tax on residential property. For example, if you are buying a property for €100,000 you will pay €1,000 in stamp duty.
Solicitor’s cost will vary so make sure you get at least three quotes from different conveyancers and compare the services they offer. The solicitor will ask you how much the house is worth and will estimate costs to register the title (Registry of Deeds or Land Registry). Each case produces a different calculation according to the property, but you can expect prices to start at approximately €2,000-3,000.
The Land Registry is the main register since 2011 but if your property was registered in the Registry of Deeds you will need to pay a fee to convert it to Land Registry. Here are a couple of examples from Property Registration Authority website. For properties valued between €50,001 and 200,000 the fee to register ownership with Land Registry is €600. For properties valued between €200,001 to €400,000 the fee is €700 (but please check with your solicitor as figures may change). You will know how much your registration fee will amount to once your solicitor receives the sale contract from the vendor.
Please note that in Ireland if you are making an offer on a property through an estate agent you will need to pay a booking fee (the amount varies in each case, normally a few thousand euros).
Process of Buying a House in Ireland
After you have viewed a property and made an offer with the estate agent and the offer is accepted, you need to pay the booking fee or booking deposit.
Now you need to keep on top of things as much as possible and communicate with your solicitor every week, ideally a couple of times a week. Conveyancers handle multiple purchases so it is in your interest to ensure things proceed smoothly and any issues are dealt with immediately.
One key indicator of the future relationship you will have with your conveyancer is the speed of response to your initial enquiry. When buying a house speed is of the essence therefore if your solicitor is very efficient and can get things organised in a timely manner you will be likely to close the sale within a reasonable time frame, avoiding unnecessary delays.
Some of the searches related to the sale can start, for example the planning search which evaluates if there are any public works lined up in the future such as widening of the roads in the local area.
Other searches are done on the day of closing, such as the Land Registry search.
The solicitor’s office has to receive the BER or Building Energy Rating certificate before you can complete on the sale.
Buying a House in Ireland Timeline
The timeline should look as follows:
- Offer accepted
- Payment of booking deposit
- Searches start
- Searches results received by your solicitor
- Organise a survey on the property
- Your solicitor raises queries about the property (for example, any disputes) following the Requisitions on the Title standard template
- Your solicitor receives answers to the queries
- Your solicitor prepares the draft contract (Deed of Conveyance) and sends it to the vendor’s solicitor
- Once the wording of the draft contract is agreed, your solicitor will ask you to come to their office to sign the contract or may send you the contract by post for you to sign and return
- Payment of the balance directly to your solicitor, including the solicitor’s fees and the stamp duty
- Once all the relevant papers (including the BER) have arrived, the vendor’s solicitors will agree to release the keys, to be collected from the estate agent
- The deeds are registered with the Land Registry to notify the change of ownership.
Case Study: Buying a House in Ireland as a Cash Buyer
I managed to buy a property in Ireland without a mortgage from the proceeds of the sale of my flat in London, UK (see related article: The House Sale Process in the UK).
My budget was limited so I could only look at houses that needed renovation. These properties are usually vacant and are either a probate sale (when someone dies without leaving a will) or a repossession (when the owner couldn’t meet the mortgage payments and the bank takes possession). However, in Ireland there are also many houses that are vacant for other reasons and are not put up for sale. According to the 2016 census almost a quarter of a million homes are vacant in Ireland (source: The Irish Times).
Some houses are derelict so they either need extensive repairs or rebuilt completely. Investors tend to grab those at below market price. Rents, particularly in Dublin, are very high so investors are buying these properties, make them habitable and rent them out. However, some investors prefer to leave acquired properties vacant. Vacant properties don’t attract tax liabilities.
All these factors mean that the supply of houses in Ireland (but mostly in Dublin) will currently not meet demand.
I viewed approximately 10 properties in different areas of Ireland that are within 1.5 hours from Dublin, where the main international airport is.
It took me about two months to get to the point when my offer was accepted by the vendor, as I was outbid five times. I was told other cash buyers (mainly investors) made an offer higher than mine and I couldn’t go above a specific budget.
Buying a House in Ireland in One Month
Everybody I talked to told me it was impossible to buy a house within a month from having an offer accepted. Generally speaking, it takes 6–8 weeks to complete the whole purchasing process. However, luck is on my side and, while you may not encounter the same combination of variables, these were the factors that got me to a successful house purchase.
- Being a cash buyer
- Instructing a solicitor before starting the viewings
- Keeping in touch with my solicitor on a weekly basis
- Being in temporary accommodation and requesting that the vendor took that into consideration
- The house was vacant because it was a probate sale
- The offer was made in November and the last working day of that year was a few days before Christmas
Normally, if a house sale cannot be completed by Christmas it will be postponed to January. However, I could not afford the luxury of paying for temporary accommodation for another two to three weeks, if not longer. On top of that, I had some belongings in storage back in London and I was paying to keep them in a storage facility. Therefore, each week that went buy was costing me, which also ate into my budget to buy a home.
This combination of factors created a sense of urgency, which helped to close the sale within a month. However, be prepared for other involved parties not to be as sympathetic. Sometimes the searches take longer than expected or some issues arise that may affect the house purchase process.
Are you planning to buy a house in Ireland? Please comment below.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2019 Paola Bassanese