Deciding to stop all the talking and start serious planning to buy a home in Ireland is an exciting first step. But what next? How do you actually go about buying a home in Ireland? And what are the costs? You’ll be pleased to hear the process isn’t so different to the UK.
The legal process
Sort the financials
If you need a mortgage for your home in Ireland, get your finances in order before speaking to any lenders. Remember to include all buying costs in your budget. Once you have a mortgage agreement in place, you can start your property search.
Or can you? Before doing any serious searching you need to speak to a currency company. We recommend Smart Currency Exchange. You need to do this because as soon as you agree to buy at a price set in euros, any change in the GBP/EUR exchange rate could drastically increase the price you need to part with in pounds. Smart will explain your options for setting an exchange rate at the price you agreed.
Find an estate agent and your property
Finding a good estate agent will help you achieve a successful Irish property purchase. They need to be legal and reliable, of course. They should also understand you and your particular requirements. Sounds obvious, but some agents never seem to get the memo!
Securing a good estate agent is the most important aspect to a successful Irish property purchase.
Since 2012, the Property Services Regulatory Authority (PSRA) has regulated and licensed all Irish estate agents. They have established a Code of Practice which all agents must uphold. The Code sets out ethical standards and procedures. You can find a copy of the Code of Practice here. Always check that any agents you’re considering are members by looking at the PSRAs website.
All properties must have a Building Energy Rating (BER), which informs you how energy-efficient the property is.
Employ a solicitor
Your solicitor will guide you through all legal steps involved in buying and selling Irish property. Charges do vary between solicitors, so shop around to secure a good price. Make sure that the solicitor you use is a member of the Irish Law Society.
Getting a good deal on your Irish home is often a question of good planning and research. Read our guide: How to Negotiate Abroad to give yourself a head start.
Make an offer
When you’ve found the right property, your estate agent will make an offer on your behalf ‘subject to contract and survey’. This clause means that you are offering to pay the specified amount unless any legal matters or problems with the survey arise.
Get a survey
The seller is under no legal obligation to reveal any problems or defects with their property. For this reason, have a professional survey carried out before finalising the purchase. This will ensure any problems are brought to your attention before you spend any money, rather than down the line when they might end up costing you a fortune. Your surveyor must be registered with Ireland’s professional body for chartered surveyors – The Society of Chartered Surveyors Ireland (SCSI). If anything arises from the survey that you were not aware of when you made your initial offer, you are within your rights to revise the offer or withdraw it completely.
Have a professional survey carried out before finalising the purchase.
Once your offer is accepted, the sale is agreed and you will be required to pay a booking deposit to the estate agent to take the property off the market. This can be a small percentage of the offer or a fixed fee. This booking deposit is refundable up until you sign the Contract of Sale. Your estate agent will then prepare a document of the sale details, which, when complete, will be sent to your solicitor and the seller’s solicitor. This document details the price, the names and addresses of buyer and seller, the estimated closing date and any conditions of the sale. Once the seller’s solicitor has received this, they will send the contracts for sale and a copy of the Title Deeds to your solicitor to examine.
At this point, if you haven’t already, you really should have spoken to Smart Currency Exchange. If the pound-euro exchange rate moves against your favour now, could you afford to complete? If not you might lose your deposit.
Closing the deal and locking in the mortgage
As soon as your offer is accepted, it’s time to make your mortgage approval concrete. You’ll need to provide the lender with all the details on the property including age, type and address. They will then send out an employee to conduct a valuation report. They might also ask to see the survey report, especially if the property is quite old. When they’re happy with everything they will approve the loan and send through a formal letter detailing your mortgage offer. This will outline:
- The value, length, cost and repayment schedule for your mortgage
- The address and description of the property
- Terms and conditions that apply to the offer
- The expiry date of the mortgage offer
Signing on the dotted line
Next, you will meet with your solicitor so that they can help you to formally accept the mortgage offer and talk you through the contract of sale. If you’re happy, you will sign two copies of the contract, which the solicitor will send to the seller’s solicitor. The seller will sign them and return one copy to you. You now have a legal agreement in place!
A closing date will be agreed upon, which is when you will receive the keys.
Making the final payments
A closing date will be agreed upon, which is when you will receive the keys. Prior to this, the remainder of the money needs to be paid. You’ll lay down your full deposit and your lender will issue the mortgage check (once you have home insurance place). If you’re purchasing an apartment, building insurance is typically included in your service charge so you won’t need to arrange this yourself. Once all the money is in the right places – your Irish property will be yours!
Transferring the deeds
Once the sale is complete, you’ll need to register your deeds with the Irish Land Registry. Your solicitor will help you with this. This process can prove quite lengthy and can range from just a couple of months up to a couple of years. If you wish to sell the property before the registration is complete, you are able to do so as the legal owner.
The costs associated with buying a home in Ireland will depend upon where you are in the country, the property price itself, whether you’re buying an old property or a new build and whether you’re buying with a mortgage. As a general rule, you’ll need to set aside 10-12% of the purchase price to cover all associated fees and taxes. These include:
- Valuation survey fee – If you’re buying an old property, you’ll require an independent valuation report to confirm that the property is worth the asking price. The cost is typically €150-200.
- Legal fees/ Conveyancing charges – These will vary depending on where you are in the country. There’s no set price for legal fees and it’s just as common for solicitors to charge a flat fee as it is for them to charge a percentage of the house price. Typically, the fixed rate will start at around €900 + VAT. The percentage fee is usually 1% of the house price + VAT, although this is typically subject to a minimum fee. Solicitor fees will be less if you’re purchasing a new build. For a property worth €300,000, you should expect to pay around €1,750 in legal fees + €345 in VAT.
- Lenders valuation fee – If you’re buying with a mortgage, a valuation will set you back €150-250.
- Land Registry fees – This depends on the price of the property. The fee is €400 for properties up to €50,000, €600 for properties between €51,000 –200,000, €700 for properties between €201,000-400,000 and €800 for properties worth more than €400,000. The land registry also charge a fee of €40 for a certified copy of the property’s folio (title plans) and a fee on all mortgages of €175.
- Search fees – A fee of around €150 is charged to check important matters such as whether there are any planning permissions that might affect your property, environmental matters, flood risks, whether any easements exist and so on.
- Commissioner for Oaths – A standard fee of €44 is charged for the Commissioner for Oaths to legally oversee your purchase.
- Stamp Duty – This is charged at a rate of 1 percent on the property price, so for a property valued at €300,000, you’ll pay €3,000.
- Property tax – You will be subject to an annual Local Property Tax charged on the market value of your property. This varies depending on your location, but you can calculate it here. For example, a property worth €300,000 in Dublin is subject to an annual tax of €497.
- Home Insurance – If you’re taking out a mortgage, taking out home insurance is likely to be a requirement of your bank. The average cost is between €450-550 per year. You’re also likely to require mortgage protection insurance, which will be calculated upon the size of your mortgage.