Ireland is a dream holiday home destination for many. Not only is it close to home, but property is cheap, the air is fresh, and nowhere will a Guinness or whiskey taste better! But, how do you go about finding – and buying – the Irish holiday home of your dreams?
Wherever you’re looking to buy property in Ireland, from the Atlantic coast, to the sunny south-east, this article will ensure you take the right steps at every stage…
What do you want from a holiday home?
Before you hop online and start searching for properties, it’s important to establish exactly what you want from your Irish holiday home. How often do you plan on using the property? Will you be popping there every other weekend, a cohort of different friends tagging along each time? If so, this might dictate the size of the property you need.
Or, if you plan on renting out the property so that others can enjoy it while you’re not in town, you will need to investigate property management companies. Plus, it might work out more cost effective to buy a larger property, as bigger properties are more popular on the holiday rental market.
It’s important to establish your budget from the off. Knowing this will guide your search and ensure you don’t waste any time looking at properties well outside your price range.
Criteria to consider…
Determining what you want and need from a holiday home from the off is essential for a successful search. Plus, sitting down and listing your criteria is a fun way to while away an evening or two.
Firstly, consider the essentials – what size you would like the property to be? Are you in the market for a house, an apartment, a cottage? Do you require a garden? Lough or ocean views? To be within walking distance of a town or city centre, or the beach? Do you need to be close to public transport? To a hospital? To a local pub? What kind of weather are you hoping to enjoy? If you want to explore the hiking trails of the Wild Atlantic Way, or the scenery of the Ring of Kerry or the Dingle Peninsula, you will want to find something within driving distance.
Once you’ve narrowed down the essentials, it will be easier to work out which towns and villages suit your needs. This will make conducting the search for the holiday home much easier, because you know exactly what you’re looking for and in what areas. As well as doing your own research online, you should locate and contact estate agents in your areas of interest. Go ahead and share your list of must-haves with the agent. Giving them as much information as possible about what you’re looking for will ensure you are only shown properties that suit your budget and tastes. For example, if it needs to be something that you can lock up and leave – tell them right away.
Future and rental prospects?
Whether you plan to pass this home down to future generations, or it’s just a holiday home while the kids are young, it’s always a good idea to consider what investors would call an “exit strategy”. Just in case something happens and you need to sell it. Your lawyer should be checking if there are plans to build anything nearby like an airport or major road, but consider what else might affect its long-term prospects.
If you are buying the property to effectively use as it as side business, factors to assess include local amenities and such prosaic but vital concerns as whether there is decent Internet! Is there a specific selling point that will draw renters in all year round, i.e. a Blue Flag beach, tennis court, or swimming pool?
Investigate the rentals market in the area you are looking at. Is it saturated by properties like yours? Is the amount they are charging what you had in mind? If the property will require some work to make it rental ready, do those updates push the property out of your budget? What about the price of hiring a property management company to handle the property for you in your absence? Is the amount you are likely to make from rentals enough to make it an appealing option?
Getting your finances in order
Before you go and view Irish properties, it’s important to have your finances in order. Looking at properties while your finances are still up in the air increases the chances of disappointment. If you are buying with a mortgage, make sure that it is secured. There are several companies in Ireland which offer attractive packages for holiday home mortgages. If you reside outside of Ireland, you will be considered a ‘foreign investor’. This means a deposit of between 30 and 50% is standard.
Additionally, to secure a mortgage, you will have to have house insurance, which amounts to around €600-700 per year.
Life insurance is also required. Make sure that both payments are factored into your budget. Furthermore, each year, property owners in Ireland are charged a Local Property Tax (LPT) of up to 0.18% of the market value of the residential property up to €1million, and 0.23% on properties over that. This tax must be paid to the Irish Inland Revenue on or before the 10th January each year. Further details on this tax can be found at the Irish inland revenue site. The good news is that Ireland has a double taxation agreement in place with the UK, which means that you won’t be taxed twice on the same property.
We always recommend every buyer consult a tax specialist prior to their purchase to get a full picture of how their tax situation will be affected by the purchase of a holiday home, as every individual’s circumstances are different.
As you will be buying your Irish property in Euros, you must give some thought to currency exchange. Currency markets move constantly, and with Brexit up in the air, things are particularly volatile right now. Ensure you aren’t negatively impacted by any surprise market fluctuations. Working with a currency exchange specialist like Smart Currency Exchange will give the peace of mind from knowing you can be protected from sudden currency movements with a forward contract. This will effectively set the price of your property, so that no matter what the markets do, you won’t be affected.
If you are planning a trip to Ireland to view properties, we recommend lining up a series of viewings over a couple of days to make the visit worth your while and cost effective. Before you agree to fly out, make sure that your estate agent is clear on what you want so that they won’t waste your time showing you properties that don’t have what you asked for, or that fall well out of budget.
Seeing a lot of properties in a short space of time can make things a little blurry. Details of one house can merge into the next, and you don’t want to decide based on incorrect facts. Take a camera, snap as many pictures as possible, and make notes on each house. This way, when you come to run through each property later in the day, you will have all the credentials laid out before you in a clear and orderly fashion, which reduces the chance for error.
Your viewing trip is your chance to explore the area, and your estate agent is your guide. Use the time journeying between properties to question them on the buying process, the local area and amenities. A good agent is a fountain of knowledge that you should take your opportunity to tap!
The legalities processes of buying a holiday home in Ireland
Currently, there are no restrictions on foreign buyers buying any property in Ireland. One important point to note is that buying property doesn’t automatically grant you right to reside in Ireland. If that is your plan, you will need to sort out residency separately, through official means. For British people, even after Brexit that shouldn’t be a problem.
Always employ a local, independent solicitor to guide you through the buying process in Ireland. Choose a solicitor who is used to dealing with property, ask for recommendations and shop around to secure a competitive rate. Your solicitor will become your best friend during the buying process. They will ensure everything goes smoothly, and guarantee you have all the information you require before making a purchase. This can save you money in the long run. For example, is your property listed? If so, there will be limitations on what you can do with the property. Do you still want to proceed? They will also be able to advise whether there are any easements on the land that could allow other people access. Having an experienced solicitor on hand, is an absolute must.