Ireland is a welcoming nation, a land of natural beauty and charm, but also one that offers good potential for those seeking to buy a second home, to invest or to retire. If that seems like a daunting task, it’s not. We explain all of the information and processes you’ll need to help you reach that decision.
Can a non-national buy property?
Yes. Currently there are no rules on non-residents buying property in Ireland – anyone can do so – and there are no limits on the number of properties or investment levels on anyone. It doesn’t matter if it’s a residential home, an investment property or a commercial property – anyone can buy.
There are no limitations. Buying land designated for agricultural production, however, runs into red tape.
No right of residency
If you’re a non-resident who buys property, there is no right of residency, however.
Residency or the right to remain in Ireland are treated separately to property ownership, and depend on each person’s circumstances. If you’re a UK citizen, Brexit has no effect. British passport holders can buy, work and live, like any Irish citizen. If you’re a citizen from a nation in the European Union or the European Economic Area, which includes Norway, Lichtenstein, Iceland and Switzerland, you can live in Ireland without any restrictions. Citizens from other areas can stay in Ireland for up to 90 days at a time and are not permitted to work.
Choose an area or community you want to be part of. A good way to do that is by actually visiting the places and talking to residents. Or there are good property portals such as www.daft.ie or www.myhome.ie.
You can also check house prices and how your home currency fares against the Euro.
Here are some areas you could look into
Dublin: The capital’s 1.6 million residents make up approximately one-third of the Irish population of 4.8 million. The city is fabled in literature, has a thriving arts scene, is steeped in history and is the focal point for Ireland’s public transport and road network.
The South East: The counties of Wicklow, Wexford, Carlow and Waterford are all less than two hour’s drive from the capital and are marketed as “Ireland’s Ancient East” by tourism officials. Wexford also boasts as being the place in Ireland that gets the most hours of sunshine every year. Its beaches are stunning too.
The South West: Offering some of the most stunning scenery in Ireland, counties Kerry and Cork have many coves and inlets with small beaches set against the backdrop of mountains and hills. The cities of Cork and Limerick have blossomed as technology and education hubs, while there are many charming villages that offer a slower pace of life.
The West: From the towering Cliffs of Moher that stand regally over the Atlantic on the coast of County Clare, to the barren and stony fields of Galway and the Aran Islands, to the rugged and under-appreciated isolation of Mayo, the West of Ireland offers a unique perspective on life in Ireland. Broody mountains accentuate the scenic backdrop of a region that’s marketed by tourism officials as the Wild Atlantic Way.
The North West: The counties of Sligo, Donegal and Leitrim offer great beaches and mountains side by side. The natural beauty is one of Ireland’s best-kept secrets, and the area is more accessible than ever with airports located at Knock and Donegal, offering easy connections to Dublin and beyond.
The North East: The Mountains of Mourne sweep down to the sea, overlooking Louth with its beaches and fishing ports. Meath too offers Megalithic funeral mounds that pre-date Egypt’s pyramids. And all are conveniently located to Dublin Airport in under an hour’s drive. Last year, 33 million passengers passed through Ireland’s main airport.
The Midlands: The geographical centre of Ireland, where lush farmland and long rivers, with gentle rolling hills and expanses of peat bogs, dominate the landscape. This land feels old, a place of legends and myths – but all under 90 minutes’ drive from the centre of Dublin.
Are you going to pay for this with your savings or borrow?
Then choose a bank or a lender for options. Following that, you also need to talk to them about transferring money overseas to make payments – the best options in terms of rates, charges, etc.
The process of buying property in Ireland
There are no restrictions on foreigners buying residential property in Ireland. But buying property does not give you a right of residency. Both the United Kingdom and Ireland are separate to the European Schengen Visa zone, operating their own common travel area. Generally, a visa granted to visit the UK will allow you to visit Ireland, and the same generally holds true for being granted an Irish visa to visit the UK. UK, EU or EEA nationals can stay as long as they wish. Generally, Irish authorities will grant a visit visa to non-EU or EEA nationals for 90 days, allowing you to travel to the UK without restrictions during that period.
Properties are listed on many different commercial portals. Or you can visit any real estate office – often called “auctioneers” by locals. Then search out the property you want to purchase and having the auctioneer arrange a suitable viewing time.
If you agree to purchase, you’ll need to engage the services of a solicitor. There are many to choose from and a majority specialise in property sales. Fees do vary but generally start in and around the €1,000 range. Auctioneers are happy to provide a list of local solicitors.
It’s common for most purchasers to organise a survey of the property to be purchased. Again, auctioneers or solicitors will be happy to advise on professionals who can examine the building for structural or technical faults, and most contracts to purchase are dependent on the surveyor’s report.
A deposit, usually 10 per cent of the agreed purchase price, will secure a property for sale while survey and other checks are carried out by your solicitor. This involves making sure the deeds are clear and correct, that there are no financial liens on the property, and that it is clear for sale.
Of agreed purchase price has to be paid as a deposit
As part of the sales process, you’ll need to show you have proof of funds in place for completion, plus pay the solicitor’s fees and other costs such as Stamp Duty on closing the deal. You’ll need to complete the sales by a certified cheque or have completed a bank transfer to your solicitor. The solicitor may ask for proof of funds in advance, which will require you to furnish bank statements.
Don’t get confused by the paperwork involved
A solicitor will be able to provide more security than a mere real estate agent or auctioneers. If in doubt, ask. Banking personnel are often willing to provide advice, knowing that you may well need to open accounts there to service your new property.
Irish property laws and sales processes are regulated and clear. Your solicitor can organise all of the paperwork and checks as well as deal with the sellers’ solicitors and auctioneers. They can also organise the survey of the building.
Across the European Union, there are strict laws governing potential money laundering. You may be required to explain how you obtained your funds, and show reasonable proof of your savings history – even if you have the cash in hand to complete the sale. Your solicitor will advise on this.
Due diligence should be conducted prior to signing agreements and paying deposits.
A deposit of 10 per cent is generally paid upon signing a purchase agreement. This sum is usually held in escrow. (escrow generally refers to money held by a third party on behalf of transacting parties, such as a mortgage lender).
Deposits are usually dependent on a satisfactory surveyor’s report – where there are no structural defects or just minor maintenance issues needing non-urgent attention. He might, for example, say that there are issues with damp, or a new roof is needed, and then estimate the cost to put things right. If you decide it’s too much, or can’t agree who should pay for that, then the deposition is returned if you decide to walk away from the purchase.
How long does it take to close a contract?
Closing usually takes 30 to 60 days later and includes the exchange of contracts and settlement of the remaining balance. When these have been accomplished, the title deeds will be submitted to the Land Registry for registration and payment of government duties. Your solicitor will do this as part of the services rendered.
Fees, taxes and duties
- Solicitors either charge a flat fee or a percentage of the house price. Typically, the fixed rate will start at around €900 (Dh3,666) plus Value Added Tax of 23 per cent. The percentage fee is usually 1 per cent of the house price plus VAT, although with a minimum fee. Solicitor fees will be less if you’re purchasing a new build. For a property worth €300,000 (Dh1.2 million) , you should expect to pay around €1,750 (Dh7,129) legal fees and €345 (Dh1,405) in VAT.
- Stamp duty: This is charged at a rate of 1 per cent on the property price up to €1 million (Dh4.07 million), and 2 per cent for a value above that.
- Land Registry fees: This cost depends on the price of the property. The fee is €400 (Dh1,629) for properties up to €50,000 (Dh203,700) , €600 (Dh2,444) for properties of €51,000 (Dh207,779) to €200,000 (Dh814,822), €700 (Dh2,851) for properties of €201,000 (Dh818,896) to €400,000 (Dh1.6 million) and €800 (Dh3,259) for properties worth more than €400,000 (Dh1.6 million). The land registry also charges a fee of €40 (Dh162) for a certified copy of the property’s folio (title plans) and a fee on all mortgages of €175 (Dh712).
- Search fees: A fee of around €150 (Dh611) 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 (Dh179) is charged for the Commissioner for Oaths to legally oversee your purchase.
- 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 on the Office of the Revenue Commissioners‘ website. For example, a property worth €300,000 (Dh1.2 million) in Dublin is subject to an annual tax of €497 (Dh2,024).
- Home insurance: It’s important to budget into the costs of buying a house in Ireland for insurance. The average cost is between €450 (Dh1,833) and €550 (Dh2,240) per year.
What can go wrong?
The main sticking point may be the condition of the property itself. Many free-standing homes have been built by small builders who may or may not have been fully trained. Electrical work may have been installed by an amateur who dabbles in wiring, for example. That’s why a surveyor’s report by a qualified engineer can be pivotal in determining the condition of what you’re buying. Just because it’s pretty on the outside doesn’t mean its roof or foundations are in good condition.
What you need to know
With roughly 1.6 million people focused on living in or close to Dublin, property prices there reflect commuters’ needs – the closer to the city centre, motorways to the capital or train links, the higher the price. Cork, Limerick and Galway are equally feeling the pinch of rising prices.
Away from the cities and commuter towns, the pace of life is relaxed, offering stunning scenery and good value for investors wanting a home away from home to simply get away from it all.
Residency or the right to remain in Ireland are treated separately to property ownership, and depend on each person’s circumstances.
Value of investment needed by foreigners to get a residence visa
Ireland does, however, offer a separate programme for high net-worth foreign investors from outside the European Union or the European Economic Area to obtain residency visas. It requires these foreign investors to put in at least €1 million (Dh4.05 million) into business ventures, be worth at least €2 million and also undergo stringent background check. Applicants must have a clean criminal record.
The residential taxes don’t cover regular bin collection and these are organised locally by competing companies.
Water and sewage services may be supplied by the local authority. In rural areas, you might be responsible for your own water if the property has a well, and sewage services if there’s a septic tank. Similarly, there are local group schemes, depending on the location.
Commercial properties, however, are subject to commercial rates. These are much higher and also set by the local authority or County Council. Again, bin collection charges on commercial properties are far higher.
If you buy a property in a city and intend to rent it out, you will be liable for personal income taxes. There is also a limit on rental increases in city areas, but new owners can get around this by refurbishing units and being able to prove their investment.
Because the Dublin market for commercial properties and new home builds is strong, it can be difficult to obtain the services of qualified tradesmen such as electricians and carpenters to work on small projects locally – trades tend to follow the money.
The cost of energy can be high too, and you’ll need to see how your property is heated. Gas supplies are common is most cities and major towns. Solid fuel requires a lot of work to organise and the government is considering restrictions on what can and can’t be used as fuel in the future. Oil heating is expensive but offers good thermal return on the energy burnt, while electric heating is expensive and requires homes with good thermal qualities, insulation and double-glazed windows to be effective. You’ll need to do your homework.
Property options to suit your budget
The lure of Ireland is strong and the property market offers a whole range of investment options to fit your budget and ambitions. There are good rental returns on properties in and around Dublin and in commuter towns with good rail or road links to the city. But some areas of Dublin are subject to rent controls. You’ll need to check with auctioneers. The further from Dublin, the more your money will go – along with the advantage of quiet living and stunning scenery.
This level of investment limits your purchasing power to small flats, likely with 1 bedroom in Sligo town, Athlone or similar small towns with apartment developments. Or you can look at small homes in areas of the Midlands, with 2 or 3 bedrooms and 1 main bathroom. The rental income from these would be in the €500 per month range. Older, rundown properties would be in your range as well, but you’re going to be in isolated areas away from amenities or transport links.
This level of investment can get you into a small two-bedroom flat in small rural towns in the Midlands, North West and South East – and these could generate monthly rental income above the €700 (Dh2852) range and would not be subject to rental cap rules. Certainly, a detached home in a rural setting – most likely a bungalow on an average of .2 hectares, with three bedrooms at most, is within range. Depending on the location, these can obtain summer rental rates of €500 (Dh2037 per week) – but only at the peak of the summer season in July and August.
This level of investment will give you a foothold in the lucrative Dublin market. This price point will get you a 2-bedroom apartment, likely to the north or west of the city with good public transport links. These will be subject to rental cap rules but can obtain monthly rents in excess of €1,400 (Dh5,705) monthly. You might also look at 2-bedroom townhomes in commuter towns such as Drogheda, Navan, Portarlington or Portlaoise. If placed on long-term lease, these obtain monthly levels in and around the €1,500 (Dh6,112) mark.
This price point buys a 3-bedroom home in the outer Dublin suburbs, or a two-bedroom flat on the south side of the capital, close to good public transport links. On rental, these properties claim Dh7,335 in monthly income, subject to rent control caps. Or what about a five-bedroom detached home with stunning sea views in Donegal – plus a separate two-bedroom cottage on your own hectare with private fly fishing on your doorstep at an adjoining lake?
Do Irish banks assist foreign buyers investing in property?
The short answer is no. The Central Bank of Ireland has implemented tough mortgage qualifying rules for Irish nationals trying to finance their home purchase. Both Allied Irish Banks and the Bank of Ireland have schemes for Irish citizens who have lived abroad to return to purchase property. Beyond that, however, you’re on your own.
Renting out your property?
Housing supply is a thorny political question in Ireland right now, with homeless figures topping 10,000 before the new year. Home prices in and around Dublin are rising fast – pricing many potential purchasers out of the market. All of this makes for a very strong demand for rental properties, putting upward pressure on rates. That’s why large areas of Dublin are subject to rent controls.
But the potential for returns is big, with even a small 1-bedroom apartment close to the centre of the city capable of earning Dh6,927 per month. There are agencies who specialise in property and tenant management, usually claiming an annual fee and a portion of the monthly income. You may lose 10 per cent or more of your potential income if you go this route.
Rent for a small 1-bedroom apartment near Dublin city centre
There are also income tax liabilities on your rental income, and you can find out more details from the Irish tax authorities at www.revenue.ie.
If you want to go the short-term rental route, you’ll need to find someone who can turn your property around for new arrivals and keep an eye on things. There are ample websites that can look after bookings online – and all will charge a set night fee or a booking surcharge and administrative costs.
The cost of living in Ireland
The Euro exchange rate is critical for investors from the UAE. The cost of living in Ireland is prohibitive. A visit to a doctor’s office costs Dh245, energy costs are high and eating out is expensive too. The upside is that Ireland offers a laid-back pace, a friendly atmosphere and some of the best sea views in Europe. It’s known as “the land of a thousand welcomes” for good reason.