Investments

Buying a Home in Ireland

Ireland has always been a popular destination for British expats. It is the 5th top choice of overseas home and has around 291,000 UK nationals already living there.

Following Brexit, Ireland is likely to become even more of a draw. The country offers links with Europe, trades in Euros, and is also the closest location in the EU with Canada and the states.

An Irish passport also offers access to travelling and living in Europe that no longer apply to the UK after Brexit.

It seems probable that, for professionals and those working for EU businesses, Ireland will become even more appealing. You’ll find organisations including Google, Facebook, LinkedIn, Microsoft and PayPal all have Dublin offices.

That said; it’s not all down to working opportunities. The Emerald Isle is well known for having astonishing wild scenery, a thriving pub culture, and a lively social scene that heralds days gone by for many expats.

There are lots of other reasons you might consider Ireland as your new home from home:

  • All permanent residents are entitled to healthcare, with free medical cards for lower-income earners.
  • Ireland offers dual citizenship, so if you live there permanently and decide to apply for a passport, you can keep hold of your existing one.
  • The rules for UK expats are generous. You can open a bank account even if you’re a non-resident, and buy a property without needing any permission.

On the downside, you’ll need to be weatherproof. The island is renowned for having unpredictable, rainy weather – and an angry Atlantic Ocean often lashes the west coast without any protection.

Still, if you can cope with the slightly chilly and damp weather, you’ll find an abundance of culture, industry and community that make Ireland a unique place to put down roots.

Let’s look at buying a home in Ireland – what it costs, which locations offer the best value for money, and how the system works.

Can UK Expats Buy Property In Ireland? 

We’ll start with travel rules and permissions since Ireland remains part of Europe. Although it is only a hop, skip and a jump from UK shores, it is an independent nation.

The UK and Ireland are part of the Common Travel Agreement. This regulation is not linked to the EU or Brexit and applies to citizens of UK countries, including England, Scotland, Wales, Northern Ireland, the Channel Islands and the Isle of Man.

While Brits may now need visas to live in the EU, they do not need a similar permit with Ireland – any nationals from any of those countries can live, travel, work or study in any other.

  • You don’t, therefore, need any visa or permission to move to Ireland.
  • There are no restrictions on non-residents buying property (although it doesn’t entitle you to residency status).
  • Both EU and UK citizens can travel or live in Ireland.

If you need a mortgage and want to borrow from an Irish bank, you’ll usually have to live in the country for at least six months and have a year’s worth of employment history before lenders will consider your application.

That doesn’t mean you cannot take out non-resident borrowing, but it is less common and generally a bit more expensive. Later we’ll explain the mortgage system in a little more detail.

The Irish Property Market

So, we know you can buy a home in Ireland as a UK national – but should you?

A lot depends on where you plan to live. Nationwide, property prices are expected to rise by around 4% in 2021, owing to short supply and strong demand according to The Society of Chartered Surveyors Ireland (SCSI).

Those growth rates vary between regions, with anticipated values rising by 3% in Dublin and 6% in Connacht and Ulster.

While the Coronavirus pandemic did put a dent in the market, it was very short-lived, and given delays in construction over the summer of 2020, the demand for property has rebounded with force. Residential listing price values fell by only 0.4% in the year to October 2020.

One of the challenges is that Ireland is a small country, but disproportionately popular with expats, businesses and investors, partly due to the lack of restrictions on property purchases by non-nationals.

Given the rapidly reducing capacity in the cities, many homebuyers are now looking at more rural regions, holiday homes in quiet spots and smaller towns which still have good broadband, travel links and amenities.

The cost of property is substantially different depending on the area you choose. The below tables show the most expensive locations, compared to the cheapest.

Most expensive property prices in 2020:

AreaAverage sale price €Average sale price £
South County Dublin€619,012£541,813
South Dublin City€428,260£374,850
North Dublin City€359,966£315,074
Dublin City Centre€345,950£302,805

Least expensive property prices in 2020:

AreaAverage sale price €Average sale price £
Leitrim€132,409£115,896
Longford€147,736£129,311
Roscommon€148,018£129,558
Sligo€154,365£135,114

Taxes, Duties and Costs of Buying an Irish Home

While you can buy any property you wish as a foreign investor, you will need to pay the appropriate charges.

Deposits stand at 10% on a non-refundable basis, and most of the purchase process is like that in the UK with most sales organised via an estate agent.

Fees payable include:

  • Registration fees – incurred when your solicitor registers your title ownership with the Land Registry or Registry of Deeds. Costs differ between the two systems. The Land Registry is the compulsory title registration process, whereas the Registry of Deeds provides a voluntary registration system for deeds and conveyances.
Property market valueRegistration fee €Registration fee £
Up to €50,000€425£372
€50,000 – €200,000€600£525
€200,000 – €400,000€700£613
Over €400,000€800£700
  • Stamp Duty – generally charged at 1% on residential property purchases to the value of €1 million (£876,000) and set at 2% for values over this threshold. The buyer pays the Stamp Duty, with the amount calculated against market value.
  • VAT in Ireland is charged at 23%, chargeable on some services including solicitor’s fees.
  • Legal fees are varied, and there aren’t fixed charge rates. Therefore you can shop around or negotiate on the costs of conveyancing work. Some solicitors will offer a fixed rate, whereas others charge a percentage of the purchase price, usually from 1% to 1.5%.
  • The seller usually pays estate agents’ fees.

The below table shows all the main costs to be aware of:

CostResponsible partyCharge
Stamp DutyBuyer1 to 2%
Legal feesBuyer1 to 1.5% (plus VAT)
Registration feesBuyer0.25 to 0.75%
Estate agents’ feesUsually split between the buyer and seller1 to 3.5% buyer’s costs 1 to 3.5% seller’s costs

The Property Purchase Process for Expats in Ireland

Buying a home in Ireland works somewhat similarly to the UK. Firstly, it’s essential to run through the following steps:

  • Establish a budget – not just for the initial costs, but also for the monthly mortgage charges.
  • Work out what deposit you can afford. This is usually at least 10% for most Irish property purchases since the Central Bank imposes lending limits on mortgage providers.
  • Most buyers appoint a conveyancing solicitor from the outset. There are no fixed charges for legal services in Ireland. Any solicitor you hire should be registered with the Law Society.

You can find homes for sale in several ways. There are the usual estate agents advertising local properties, but you can also buy direct through property websites or purchase homes at auction.

Some sellers market homes for sale independently, often through supplements in the local newspapers.

Examples of some of the most popular property listing websites include:

Once you have viewed properties and decided on a home you’d like to buy; the process typically works as follows:

  • Have a survey carried out. This step is vital to ensure there are no serious structural issues to be aware of. It can also be a negotiating factor, since any upcoming maintenance or repair requirements, such as a new roof, can be accounted for in the pricing.
  • Seek mortgage approval. Many lenders don’t offer mortgage products to expats until they have been resident in Ireland for a certain amount of time; more on that in the next section. You can get an agreement in principle just as in the UK if you’re not yet ready to proceed.
  • Once a price has been accepted, both parties sign a contract for sale. If you sign a sale contract and then can’t get a mortgage, or decide to back out of the purchase, you will usually lose the deposit and incur other penalties. Auction properties require an immediate contract for sale. For private purchases, a solicitor will review the agreement before signing. The contract sets out the balance payable and the agreed completion date.
  • The next stage to close the sale is dealt with by the solicitors. Your representative raises queries through a process called Requisitions on Title. Next, a Deed of Conveyance is submitted for approval.
  • After the legal checks are finalised, your solicitor usually contacts your mortgage lender and arranges the balance transfer. Stamp Duty is payable before the sale closes, and must be paid to the Revenue Commissioners before the deed can be registered.

After your house purchase completes, your solicitor needs to register the new ownership detailed with the Land Registry or the Registry of Deeds through the Property Registration Authority.

This process can take some time, but you are still the property owner and can sell it even if the registration is still being processed.

Mortgaging a Property in Ireland as an Expat

Most expats buying a home in Ireland will need a mortgage. The rules around investment properties are similarly accessible, so many expats choose to purchase investments or holiday homes.

In the past, getting an Irish mortgage was known to be reasonably tricky. However, as the property market has grown, the mortgage market has also expanded.

Banks remain cautious about mortgage lending, and you might find the process takes longer and is more in-depth than in the UK with more documentation required to evidence your income and residency status.

The lending sector’s conservative attitude means that you will need to meet strict affordability and eligibility requirements.

As in the UK, you can choose between a fixed rate and variable rate lending. Standard Variable Rate mortgages rely on the interest rates set by the Central Bank of Ireland.

Some expats choose to mortgage a property purchase through a broker, which is advisable if you aren’t familiar with the range of lenders and products available. It’s also wise for non-nationals who do not hold legal residency, as you will have fewer lenders to choose from.

Most brokers charge around €500 (£438), although some will charge based on a purchase price percentage.

Anybody can buy a property in Ireland, provided they are legally allowed to live there. Banks set their individual terms, and residential mortgages are far easier to come by then buy-to-let borrowing.

Expats are considered a higher risk, so generally, the terms and interest rates aren’t quite as competitive as for citizens. You will also find the process much easier if you have an Irish bank account, and earn income in Euros.

Many banks will refuse any applicants who are not paid in the same currency as the mortgage.

Banks in Ireland with specific mortgage products or services that are designed for expats include:

Types of Property for Sale in Ireland

As with any country, there are lots of different properties to choose from in Ireland. A lot depends on whether you’re considering central Dublin, where you’ll find a range of contemporary apartments, or if you’re aspiring to a quaint cottage in a more rural area.

Many flats are converted from period properties. There are modern constructions in the cities, mainly in new development areas on the outskirts.

Parking is an issue where residential areas rely on street parking, and few properties are offered for sale with off-road parking or driveways.

Houses in the cities are nearly all terraced or semi-detached, with lots of row houses. If you’re looking for a detached property, you’ll need to look further afield in the villages or towns outside of the leading employment areas.

Many expats like the idea of buying a guest house in Ireland and using that as income in retirement. This option requires lots of planning

A few things to consider when viewing Irish properties for sale:

  • The winter is cold, so double (or triple) glazing and insulation are essential. Many homes have working fireplaces, and numerous people use Irish turf as a fuel source, a type of compressed peat you’ll find for sale in the supermarkets.
  • Heating devices are often a little different from what we’re used to. Many homes have night storage heaters, which store thermal energy and heat up overnight when electricity rates are lower. If you look at a listing and see it has a hot press, this means an immersion heater stored in a cupboard.
  • Homes for sale should come with a Building Energy Rating, which tells you how energy-efficient they are.
  • Radon is a radioactive gas. There are some High Radon Areas in Ireland, and you should check whether a property is in one of these regions through the Environmental Protection Agency (EPA) Radon Risk Map. Properties can also have testing certificates if they are in this region.

If you’re buying through an estate agent, they will typically include all of this information in the property pack.

Frequently Asked Questions – Buying a Home in Ireland

Are UK expats allowed to buy a property in Ireland?

There are no rules in Ireland that prohibit foreign nationals from buying a property. However, owning a home in Ireland does not automatically grant you residency rights.

Under the Common Travel Agreement, all UK citizens have the right to live, work or study in Ireland.

If you wish to apply for residency, you will need to apply through the Department of Justice.

The capital of Dublin is, without a doubt, a popular destination for expats from around the world. It is famous for having a thriving nightlife scene and being a cultural city that is home to many of the country’s top employers.

Over on the west coast, Galway is also a great option and a base for the technology sector.

Another hub for expats is in Limerick, around two hours from Dublin. It is a much smaller city, with a quieter lifestyle, but close enough to the capital to provide access to amenities and travel hubs.

Do expats need to pay property taxes on Irish homes?

If you’re a non-resident, you will need to pay taxes on your income earned from within Ireland. The tax year runs alongside the calendar year from January to December.

Rental income from investment properties is taxed at 20% net and declared via a tax return as in the UK.

You will need to pay stamp duty on a property purchase, at between 1% and 2% depending on the value, plus capital gains tax for property sales that generate a profit. Capital Gains Tax in Ireland is charged at a flat rate of 33%.

Irish property tax rates are charged against the home’s value, for properties valued at €1 million (£876,000) or above.

Property tax is charged at:

  • 0.18% for properties valued at €1 million.
  • 0.25% on the value over €1 million.

How much can I borrow on an Irish mortgage?

In Ireland, the Central Bank sets a cap on mortgage lending called a loan to limit ratio. That means that the maximum a mortgage lender can offer is dependent on your annual income.

First-time buyers must provide at least a 10% deposit, and the caps depend on your income band.

For example, if you earn €50,000 (£44,000) a year as a gross salary, you can borrow up to 3.5 times that, so a maximum mortgage of €175,000 (£153,000).

This limit increases for joint mortgages where two incomes are provided for the calculation, and there are variances in the income multiplier depending on your circumstances.

You can check the Bank of Ireland mortgage calculator for a rough idea about the limit on an Irish mortgage.

Remember that many banks will not lend to expats who have not been living in Ireland for at least six months, and with an employment record of less than one year.

It’s best to seek help from a mortgage broker with experience negotiating mortgages for non-nationals or to review the eligibility criteria before applying to a lender.

Buyers need to have a mortgage agreement in principle in place early on in the house buying process. If you agree to a contract for sale and cannot get a mortgage, you usually sacrifice your 10% deposit and may be liable for other fees.

What are the benefits of buying property in Ireland?

As we’ve seen, the property market is growing fast, and with increasing prices across the board, it is unlikely that you will be able to buy a home cheaper in the future than you can now.

There is a strong potential for appreciation, and a return on investment for properties of all types, but particularly in commuter belt areas.

Prices in the city centres can be extremely high, but the costs of detached homes in rural towns and villages are much lower.

Many have public transport links with the metropolitan areas and are therefore within a viable commute but at a significantly lower price.

Demand for property is expected to continue increasing, with Ireland a key destination for expats seeking a home within the European Economic Area.

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