Ireland is situated in the Atlantic Ocean and separated from Great Britain by the Irish Sea. It occupies the entire island except for the six counties that make up Northern Ireland and remain as an integral part of the UK. Ireland resembles a basin, a central plain rimmed with mountains, except in the Dublin region. The mountains are low, with the highest peak, Carrantuohill in County Kerry, rising to 3,415 ft (1,041 m). The principal river is the Shannon, which begins in the north-central area, flows south and southwest for about 240 mi (386 km), and empties into the Atlantic.

Ireland in the EU. Includes Irish Government sites and Tourist Information.

Before leaving to come to Ireland, make sure you understand your legal situation. Depending on your nationality, you might need a visa, residence permit and/or work permit. Non-Irish citizens (known officially as Ďaliensí) arriving from EEA countries are free to enter Ireland; there are nevertheless certain formalities which must be observed. If you arrive in Ireland from the UK, youíre exempt from immigration control at the port of entry into Ireland, but you may not stay longer than one month without obtaining permission to remain. If youíre a non-EU national and arrive in Ireland from outside the EU, you must go through immigration for non-EU citizens. Non-EU citizens are required to complete immigration registration cards, which are provided on aircraft and ferries (e.g. from France) in order to be granted leave to land. Some people may wish to get a stamp in their passport as confirmation of their date of entry.

Britons make up the largest expatriate community in Ireland with a large American community in Dublin.

Capital Gains Tax is charged at 20% which excludes your main residence.

There are no restrictions on Foreign Ownership.

Fees/Costs: Fees are considerably lower on new properties than for resale properties, on which stamp duty must be paid. The fees payable when buying a property in Ireland include some or all of the following:

         stamp duty (except for first-time buyers and new properties);

         legal fees;

         deed registration fee;

         survey or valuation fee;

         ground rent (leasehold properties only);

         management fee (apartments only);

         VAT (certain commercial properties only);

         utility connection fees (new properties only);

         selling agentís fees (normally Ďincludedí in the property price);

         mortgage costs, e.g. application fee, mortgage indemnity fee (on loans above a certain percentage of the purchase price), and life assurance or a mortgage protection policy.

Always ensure you know exactly what the total fees will be before signing a contract.

Stamp Duty: Stamp duty is the main fee involved when buying a home in Ireland. Itís the tax on the purchase deed payable by the buyer when the sale is closed. The rates and criteria for stamp duty were changed in April 1988 and again in June 2000. New houses and apartments with a floor area of less than 125m2 are still exempt from stamp duty. However, the duty will usually become payable if a property is let within five years of the date of purchase, which means that, if you purchase a new property as a holiday home with the intention of letting it for the rest of the year, youíll no longer avoid paying stamp duty.

In the case of new houses or apartments of 125m2 or more, the stamp duty is calculated on the basis of the site value or 25 per cent of the combined value of the site and the building, whichever is greater. In the case of resale properties, stamp duty is payable on the full value of the site and building.

There are now three scales of stamp duty rates on residential property, for first-time buyers, owner occupiers (i.e. those living in the property, other than first-time buyers) and investors (i.e. those purchasing a property other than their home for letting purposes).

As well as having to pay 9 per cent stamp duty on all property purchases, investors are liable to a new tax introduced in June 2000, called an anti speculative property tax. This is a 2 per cent levy on the value of the property payable for the first three years after purchase (purchases after 2002 will be exempt from this tax).

Both stamp duty and anti speculative property tax are paid to the Revenue Commissioners, but, whereas stamp duty is paid at the time of purchase, property tax is due at the same time as your income tax. This means that itís up to you to declare it on your annual tax return.

Note that the cost of any fixtures and fittings (e.g. carpets and curtains) included in a purchase is taken into account when determining the stamp duty Ďbandí. You need to ensure that you buy the fixtures and fittings separately.

There is a 50 per cent stamp duty relief on conveyances between certain classes of blood relative. Transfers between parents and children of land (up to a value) on which the children are to build their principal residence are exempt from stamp duty.

Legal Fees: Since the Competition Act, 1994, solicitorsí fees for conveyance are no longer subject to a fixed scale of charges and you must agree to them in writing in advance. Under section 68 of the Act, a solicitor is bound to notify a client in writing of the fee to be charged for a particular transaction or of the basis on which the fee will be calculated. The actual amount depends upon the work involved, although according to the Incorporated Law Society of Ireland you should expect to pay between 1 and 1.5 per cent of the property price.

Irish solicitors will not usually agree to undertake only part of the conveyance, such as checking the sales contract. Although engaging a solicitor and paying his/her legal fees is optional, it is highly recommended. Legal fees are always exclusive of disbursements and are subject to VAT at 20 per cent. Fees are usually paid on completion but before registration (see below). Registration can take a year for a new house and even longer for a very old, unregistered property. If there are problems with registration, you may be liable for additional solicitorís fees.

Registration Fee: Your solicitor will pass on to you the charges relating to registration of the title deed to a property. There are two kinds of title in Ireland: registered and unregistered.

 

 

Registered land: This was introduced by the local Registration of Title (Ireland) Act, 1891 and means that a record of the land is kept with the land registry. Registration, which is compulsory in all counties of Ireland, provides proof of ownership. When a property is sold, a Deed of Transfer is lodged with the land registry, and the Registrar simply deletes the vendorís name and substitutes the buyerís. The land registry recently went onto the Internet, so itís now possible to check ownership and other property details from the comfort of your computer terminal, although it is still wise to use a qualified solicitor).

Unregistered land: Title documents must be inspected by your solicitor to establish ownership. Copies of these documents are lodged with the registry of deeds in accordance with the Registration of Deeds Act, 1707 in case there is a conflict of interest, such as if two people try to take out a mortgage on the same piece of land simultaneously.

A deed of conveyance is used to transfer freehold unregistered land, a deed of assignment for leasehold unregistered land. There is roughly an equal amount of registered and unregistered land in Ireland, although land in rural areas is more likely to be registered.

In addition, you will be charged for land registry searches, commissionersí fees, and a copy folio and map. In the case of registration with the registry of deeds, the fees will include searches, commissionersí fees, and memorials (copies) of the purchase deed and mortgage deed.

Survey and/or Valuation Fee: If you employ a surveyor to inspect a building or plot of land before you offer to buy it (which is strongly advised), the fee will depend on the kind of survey, any special requirements and the value of the property. Some lenders make a fixed charge on a sliding scale according to the value of the property. The valuerís travelling expenses are usually added to the bill. If the mortgage is refused, the valuation fee is refunded.

The cost of a full structural survey is generally added to the valuation report fee but, if you use the same firm for both, you may be able to negotiate a reduced rate. Note that your mortgage lender may insist on a structural report if a property is over 100 years old.

Ground Rent: Title may be freehold, where the property is theoretically held forever free of rent, or leasehold, where itís held for anything from 250 to 9,999 years. In the case of leasehold property, itís normal for a nominal ground rent to be paid to a superior title holder, i.e. landlord. There are even cases where the property is leased rent free.

 

 

Management Fee: If you are buying an apartment, you will usually become liable for annual management fees. Each apartment owner automatically becomes a member of the management company responsible for the insurance and upkeep of the common elements of the property, e.g. grounds, entrances, hallways, lifts and stairs. To cover the costs involved thereís usually a fund to which each owner must contribute. The amount payable depends on a number of factors such as the extent of the grounds and the age and condition of the property.

 

VAT: Under the Finance Act, 1997, VAT must be included in the price of new properties and doesnít apply to resale properties. However, commercial property transactions may be subject to VAT at 12.5 per cent, unless the property was developed before 31st October 1972 and hasnít been extended, altered or adapted since. The rules regarding VAT on property are complicated and you should take expert advice before completing any commercial property transactions, particularly as there can be serious implications if you make a mistake.

 

Utility Connection Fees: If you buy a new property, you may need to pay for connection to electricity, gas and mains water supplies, as well as for the installation of meters. Your builder will usually provide electricity and gas connections and meters, and the cost of these should be included in your quotation. Provided that a property is within 15 metres of a gas main, there should be no charge for connection.

In the case of electricity thereís a fixed connection charge (plus VAT at 12.5 per cent) if the property is within a certain distance from the medium voltage network. If the property is further than the specified distance from the network, an additional charge will be made according to the work necessary and in some cases thereís an extra charge even if the property is within the specified distance.

You must usually arrange your own water main connection, which can be expensive. Connection charges vary considerably from county to county. You should make enquiries at your local city, county or borough council so that you know how much to budget for.

Estate Agentís Fees: Estate agentsí fees are usually paid by the vendor. They are, however, usually allowed for in the asking price, so in effect are paid by the buyer. As a buyer youíd be responsible for a separate fee only if you retained an auctioneer to purchase a property on your behalf, in which case you should agree a fee in advance and confirm it in writing. The auctioneerís fee can vary between 1 and 3.5 per cent of the selling price, depending on the cost of the property and the type of contract, but itís usually around 2.5 per cent and is subject to VAT (at 20 per cent).

Mortgage Application Fee: Most banks and building societies charge a mortgage application fee when they grant a mortgage. When looking around for a mortgage, however, you should ask if the lender is prepared to waive the fee? With increasing competition for mortgages, many lenders will agree to do so. Note that  lenders should not ask you to pay any legal costs as they usually use your solicitor for their legal work. Check this with them before confirming your mortgage.

Mortgage Indemnity Fee: If you borrow more than 70 or 80 per cent, then depending on the lender, you must pay a mortgage indemnity fee (also called a mortgage indemnity bond) of around 3 per cent of the difference between the specified percentage of the purchase price and the amount borrowed, plus a 2 per cent government levy. Some lenders spread the cost of the indemnity over the term of the mortgage, while others donít charge an indemnity fee but charge a higher rate of interest for loans above 80 per cent. If you are buying a property as an investment, the indemnity fee is 4 per cent.

Mortgage Protection Policy: You will need to obtain life assurance before your lender will agree to advance your mortgage. A mortgage protection policy is usually the minimum cover required.

Annual and Running Costs: In addition to the fees associated with buying a property, you should take into account the annual and running costs. These include management fees (for apartments), garden maintenance (if applicable), and building and contents insurance. There are no local authority charges, Ďratesí or Ďpoll taxesí for residential property in Ireland, but you will incur standing charges for utilities (electricity, gas and telephone). Water is free (unless you run a business from home) and the cost of refuse collection varies. In a few places, however, the local authority charges more for larger properties. If you are letting a property, you should also allow for property management fees, income tax on rental income and possibly an accountants fee.

Rental Market: Unlike most other  European countries, there is not a strong rental market in Ireland, where families have traditionally preferred to buy rather than rent. There is a chronic shortage of rental properties in some areas, particularly in Dublin, and rental properties with three or more bedrooms located in good areas are in short supply. In Dublin,  queues of prospective tenants are commonplace.

Demand for rented accommodation continues to be high and there are signs that investors are being attracted back into the rental market by the prospect of low interest rates.

Most rental properties, whether long or short-term, are let furnished and long term unfurnished properties are particularly difficult to find. The standards of rented accommodation in Ireland are generally good. The Housing (Standards for Rented Houses) Regulations 1993 specify certain minimum requirements regarding structural condition, the provision of sinks, toilets, baths/showers, cooking and food storage facilities, the safety of electrical and gas installations, the adequacy of heating, lighting and ventilation, and the maintenance of communal areas.

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.

22-10-2009