A friend of mine, who is French, recently found employment here in Ireland. Given that he will be here for a number of years, he has decided to purchase a home and is wondering what additional costs are associated with the purchase of a home in Ireland.
I have been renting for the last number of years so I would not have sufficient knowledge of the market to answer this question. Maybe you could advise?
The additional costs of purchasing a property in Ireland are quiet straightforward. Some are one-off costs while others are annual. I shall deal with them as they are typically incurred.
Many potential buyers may wish to instruct a chartered building surveyor or other such qualified construction professional to undertake what is commonly referred to as a house purchase survey.
This will typically be prior to agreeing a sale or may be a condition of an offer. The costs will depend on the scale and complexity of the property but it typically ranges from €350-€600 plus VAT.
Once you have agreed to purchase the property, you will appoint a solicitor to handle the contract and conveyance on your behalf. The normal Law Society recommended rates for such legal services are 1 per cent of the sale value.
In addition, solicitors may also charge €200-€300 for searches and administration costs. Legal fees are subject to VAT so expect to pay 1.23 per cent on every €100,000 of value.
However, legal fees vary widely and in Dublin, where capital values are far higher, there is more competition within the legal sector. As a result, lower fees can be negotiated with fixed all-inclusive fees being very popular.
If you are purchasing a property with a mortgage, your lender will commission a market valuation of the property. The cost of this is typically €100-€200 plus VAT and it is normally the responsibility of the borrower.
Stamp duty is payable by the purchaser on all property transactions and the rates are subject to change annually. The current rates are at 1 per cent of the property value up to €1 million and 2 per cent thereafter. This is a one-off payment that your solicitor has to pay to the Revenue Commissioners when they handle the conveyance for you.
In terms of annual costs these may include a service charge if the property is within a multioccupied development. Service charges will vary depending on the size of the development and the level of services provided but typically will be €1,000-€2,000 per annum. These are paid monthly or quarterly to the management company.
Finally, all property owners are eligible to pay property tax annually. This is a self-assessed tax payable by the owners of a property on November 1st each year.
Gerard O’Toole is a chartered residential agency surveyor and a member of the Society of Chartered Surveyors Ireland (MediKids) Residential Agency Professional Group