Ireland becomes an increasingly popular investment destination, particularly after the Brexit, and more investments will be allocated here.
The country attracts many overseas students who look for quality education, at the same time as they can become internationalized and learn English.
Luckily, it’s significantly easier to buy property in Ireland compared to Southern European and Asian countries. In fact, Ireland has sprung up as one of the most popular options when overseas investors look for real estate.
In this article, we review how you can buy property in Ireland, covering everything from regulations, taxes, and the buying process.
- Can foreigners buy property in Ireland?
- The process when buying property in Ireland
- Property Taxes
- Can I get a residence permit if I buy property in Ireland?
- Can I rent out my property?
- Property Prices in Ireland
Can foreigners buy property in Ireland?
Foreigners have no general issues buying property in Ireland, which is similar to many other European countries. That’s not the case in Asia where foreigners encounter strict foreign property ownership regulations.
In countries like Thailand and the Philippines, foreigners can generally only own condominium units on a freehold basis, with certain quotas.
You don’t have to be a resident in Ireland either, which is the case for buyers of established properties in Australia.
There are no limits on the number of properties, making local ownership regulations highly competitive.
Can foreigners buy land in Ireland?
While EU citizens have no restrictions to purchase any type of land in Ireland, non-EU citizens need to get approval from the Land Commission, before buying any farmland (agricultural land).
Non-EU residents have no restrictions to buy urban land whatsoever.
Process when buying property in Ireland
Even if it’s considerably easier to purchase a property in Ireland, compared to countries like Spain and Southeast Asian countries, you need to study the buying process well in advance.
Let’s have a look at the buying process when you buy your property in Ireland.
1. Find a Real estate agent
First of all, you need to find a property that suits your needs and price range. You can contact local real estate agents, or an Auctioneer as they are usually called in Ireland.
I recommend you to ask people like friends, relatives or colleagues, who have a relation to Ireland.
Maybe they have children studying there or have bought a property for investment purposes previously. You can also contact the Irish communities where you live, including the Chamber of Commerce or your local embassy.
A common way to find real estate agents is also to simply search online. If you find a real estate that looks reliable, you can check search for an agent at the PSRA’s website (the Property Services Regulatory Authority).
Also, don’t forget to check IPAV’s (the Institute of Professional Auctioneers and Valuers) website, which is the National register for Auctioneers in Ireland.
IPAV can be compared to EAA in Hong Kong and work proactively to assure that foreign investors are treated in the best way.
What should I ask the Auctioneer?
Questions you can ask the auctioneer to confirm his or her credibility are:
a. Whether the person is licensed
b. That the Auctioneer has good knowledge about the neighborhood you intend to invest in, such as property prices and the turnover of properties
c. If the Auctioneer has sold any properties in the area recently
d. If the Auctioneer has helped buyers from your home country
Continue to add questions to the list and make sure that they have good knowledge of the Irish market before you decide to hire them.
How high are agents’ commissions?
You need to pay a fee of around 2%, but it might vary depending on which Real estate agent you chose.
In Hong Kong, the agents usually get a fee of around 1% is the same as in Hong Kong, in Spain they get 3% to 6%, just to make a comparison.
2. Get a preliminary mortgage agreement (Approval in Principle)
As explained in my previous articles, it’s important that you get a preliminary mortgage agreement with a bank, to assure that you can finance your property.
You don’t want to end up with insufficient money to buy your property when deposits and other fees are paid.
The biggest banks in Ireland are:
a. Bank of Ireland
b. Allied Irish Banks
c. Ulster bank
The bank will require many documents from you before they can grant you approval.
a. A copy of your passport
b. Bank statements (usually stretching 6 months back)
c. Proof of address (such as electricity bills or similar)
d. Documents showing the mortgages you already hold
For detailed information, contact the banks and make sure that you prepare all the documents needed.
3. Find a solicitor (property lawyer)
Real estate agents are generally sufficient to guide you through the process. But, for larger transactions and particularly for land purchases, it can be worthwhile hiring a solicitor.
The solicitor should be licensed and have a good knowledge of Irish property laws.
Preferably, he or she should also show some showcase studies or provide testimonials from previous buyers.
The solicitor, agent, and mortgage provider often work in synergy during the buying process.
The order of the first three steps of the buying process can be considered as a parallel process, that you need to engage in.
4. Check the title deed
The solicitor will help you to check the title deed at the Land registry, to confirm that there are no hidden mortgages, unpaid taxes or unknown encumbrances attached to the property.
The same as for Spain, the fees will be transferred automatically to you when the property transfers in your name. You should check all documents thoroughly, together with the solicitor, before paying the deposit.
5. Pay the deposit and sign the Contract for sale
When you’ve decided to buy a property, you must pay a deposit equivalent to 10% of the property value, in case you’re a first-time homebuyer.
If you’re a second-time home buyer, the deposit will be doubled, at 20%.
When you’ve paid the deposit, the seller will normally send a so-called Contract for sale to your Solicitor.
If you don’t continue and buy the property after the Contract for sale is signed, you might lose your deposit to the seller.
And it goes the other way around, in case the seller decides to withdraw from the deal.
6. Sign the Sales agreement
When you’ve informed your Auctioneer that you want to buy a property, he or she will submit a document, including your offer, to your Solicitor and to the seller’s Solicitor.
Information such as details about you and the seller, the settlement date, your offered price, and dates of payment will be included, among others.
7. Finalize Your property Loan
After the Valuer has checked the property and confirmed the property value, you will receive a Letter of Offer from the bank. The letter of offer will include information such as:
a. The value of the loan
b. The repayment period
c. How often you should make repayment installments
Set up a meeting with your solicitor once you both have received the Letter of Offer, and other related documents. You should review the documents together, to assure that everything is okay before you continue.
As explained in my other country guides, there are three taxes you usually need to pay as a foreign property buyer:
a. Stamp duty
b. Property tax
c. Capital gains tax
Below you can find the most important taxes that you have to pay when buying, holding or selling real estate in Ireland.
Keep in mind that other taxes might be charged, you should confirm this with your agent and/or solicitor beforehand.
The stamp duty ranges from 1% to 2%. It’s paid by the buyer at the time of the acquisition.
If you want to learn more about what stamp duty is and what the rate is in our covered countries, you can read this article where we cover more details.
The property tax is 0.18% for properties valued under EUR 1,000,000. You need to pay 0.25% for everything above that value.
The property tax is collected from all resident owners to finance different services like snow clearing, waste disposal, or maintenance of common areas, public parks, and street lighting.
Capital Gains Tax
The Capital gains tax is comparatively high and set to 33%.
However, you can deduct costs from your taxable profit, such as previous Solicitor fees and other costs that arose when you bought the property.
Can I get exemption from Capital gains tax when I sell my property?
Yes, you will be able to avoid the Capital gains tax in case:
a. You have used the property as your main residence
b. You can claim a partial exemption in case you rented out your property
c. The first EUR 1270 on your profit is not subject to Capital gains tax (after you’ve deducted relevant fees and costs)
Can I get a residence permit if I buy property in Ireland?
Yes, you can get a 5-years residence permit for you and your family in case you make an investment that is EUR 1 million or larger.
EUR 500,000 needs to be invested in the property itself, and the remaining EUR 500,000 in securities like stocks.
Bear in mind that you need to finance everything from your own pocket, you’re not able to apply for a mortgage and take that into account.
This makes Ireland a popular option for foreigners who wish to reside in Europe long-term and build up a base here.
Can I rent out my property?
Yes, you can rent out your property and you can expect high rental yields in places like Dublin, and university cities like Cork.
A large number of Irish people (especially young people) want to buy property in these cities, resulting in high yields.
How much can I expect in rental income in Ireland?
You can expect rental incomes varying between EUR 700 – 1500, depending on where you buy.
On a percentage, you can expect everything from 5% to 8%, where Dublin provides the best yields.
This outperforms many places, like Singapore, where rental incomes provide a yield of not even 3% in average.
Yields reaching 5% to 8% in a developed country is great and rarely heard off.
Property Prices in Irealand
The Irish property market crashed and was unstable for several years after 2008, affecting its economy badly.
You might have heard about the “PIIGS” countries (Portugal, Italy, Ireland, Greece, and Spain) that experienced most of the biggest struggles.
But the Irish economy and property market have caught up and the prices have increased tremendously over the past years, outperforming many other European countries, such as the UK.
Rental Income Tax
The rental income tax is 20% up to EUR 67,000.
You’ll need to pay a rental income tax of 40% on everything above EUR 67,000.
Foreigners have no particular issues in buying apartments, villas, or land in Ireland, which makes it a great place to invest.
The country hosts many good Universities, especially in Dublin. If you plan to send your children abroad for high school or university education, you should definitely have a look at this country.
Parents shouldn’t stare blindly at cities like London and Manchester as Dublin is a suitable option for overseas studies as well.
Ireland struggled hard during the economic crisis in 2008, and the following years, but has caught up and the property prices have surged.
If you plan to buy-to-let, you can expect great rental yields ranging up to EUR 1,500 in places like Dublin.
Another benefit of buying real estate in Ireland is that overseas investors can get residency permits for 5 years. This gives you enough time to settle and explore local opportunities.
3 Responses to “How to Buy Property in Ireland: The Ultimate Guide”
Dear Marcus Sohlberg,
I would like to know more and receive updates of property in Ireland especially in Dublin. recently I just send my eldest daughter to study in Griffith College, Dublin. Planning to buy a house as soon as possible. I need to explore more about the financing and investment in Dublin for a foreigner. Your prompt reply would be highly appreciated. Thank you !
Dear Jean Teh,
Unfortunately, we currently focus more on the Asian market, as we are based here and believe there will be strong growth here long term.
Dublin is interesting for sure, Brexit, overseas education, and more, are main drivers.
I will send you an email so that we can talk more.
Thank you very much for your post. I am an architect running my own office in HK and HCMC Vietnam, what are relevant to your current business.
I’ve found some very interesting offers at daft.ie and hope will be in touch with some local agents soon.
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