• How Asian Investors Can Buy Property in Ireland: A Complete Guide

    Posted on 3 Comments

    buying-property-ireland

    Ireland is one of the European countries that suffered hard during the economic crisis in 2008.

    Together with Spain, Portugal and Greece, these countries were commonly referred to as PIIGS (I agree that the name doesn’t sound so pleasant).

    However:

    The Irish economy has recovered and the country hosts great universities in places like Dublin and Cork.

    If you plan to send your children overseas for education, you should not turn your blind eye to this country.

    With the UK leaving the EU, the media frequently talks about Dublin and the opportunities it gives.

    Expect great rental yields, an astonishing nature and a historical touch that make Asian investors keen to invest here.

    In this article, I will explain all the details you need to know when buying property in Ireland.

    Can foreigners buy property in Ireland?

    Compared to countries like Australia and Thailand, foreigners have no restrictions to buy properties in Ireland.

    That’s not only valid for condos, but includes all types of properties, including landed houses.

    You’ll not have any issues to buy a house close to the golf course with an ocean view.

    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 an approval from the Land Commission, before buying any farm land (agricultural land).

    Non-EU residents have no restrictions to buy urban land whatsoever. This is highly beneficial and not as simple in countries located in East Asia.

    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.

    You don’t want to make any hasty or costly mistakes when buying property on the other side of the globe, right?

    Let’s have a look at the buying process when you buy your property in Ireland.

    1. Find a Real estate agent (Auctioneer)

    First of all, you need to find a property that suits your needs and price range.

    That’s often done by contacting a local Real estate agent, 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 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, that 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?

    Some of the key items you should check to confirm the Auctioneer’s credibility are:

    a. That the Auctioneer is licensed

    b. That the Auctioneer has a 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 much do I need to pay the Real estate agent (Auctioneer) as a foreigner?

    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 same as in Hong Kong, in Spain they get 3-6%, 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 a mortgage approval.

    Some of the documents are:

    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 (Lawyer)

    You should hire a Solicitor to help you through the Conveyancing process.

    The Solicitor should be licensed and have a good knowledge of Irish property laws.

    Preferably, he or she should also show some show case studies or provide testimonials from previous buyers.

    Notice: The Auctioneer, Solicitor and mortgage provider will most 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.

    How much do I need to pay my Solicitor as a foreigner?

    The Solicitor fee is usually set at 1% of the property value. On top of that, the Solicitor will handle the process when transferring the property in your name.

    If you want to know more about what a Solicitor does, I recommend you to read this article.

    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 it goes in Spain, these fees will be transferred automatically to you when the property transfers in your name.

    You should therefore check all documents thoroughly, together with the Solicitor, prior to paying your deposit.

    5. Pay the deposit and sign the Contract for sale

    When you’ve decided to buy a property, you need to pay a deposit of 10% to the seller in case you’re a first time home buyer.

    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 mortgage

    mortgage-ireland

    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 mortgage you’ll get

    b. The repayment period

    c. How often you should make repayment instalments (to amortize the loan)

    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.

    What taxes do I need to pay when buying property in Ireland as a foreigner?

    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

    What is the Stamp duty for non-resident foreigners in Ireland?

    The stamp duty is 1-2% and usually paid by the buyer, at the time you buy the property.

    If you want to learn more about what stamp duty is and what the rate is in our covered countries, you should read this article.

    What is the Property tax for non-resident foreigners?

    The property tax is 0.18% for 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.

    What is the Capital gains tax for non-resident foreigners?

    The Capital gains tax is rather 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 bigger.

    EUR 500,000 needs to be invested in the property itself, and the remaining EUR 500,000 in securities.

    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.

    Can I rent out my property as a non-resident foreigner in Ireland?

    Yes, you can rent out your property and you can expect high rental yields in places like Dublin, and other University cities like Cork.

    A large number of Irish people (especially young people) want to buy property.

    But they can’t, as the banks are less willing to provide mortgages, due to the crisis that unfolded some years ago. Many locals have therefore been forced to rent properties.

    You should ask the Auctioneer if they can help you to rent out your property. But you can turn to another Real estate agent in case they are not capable to help you.

    If you’re not planning to reside in Ireland, you should find a company that can manage maintenance, tenants and make sure that the property is kept in good condition.

    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 5-8%, where Dublin provides the best yields.

    This outperforms many places, like Singapore, where rental incomes provide a yield of not even 3% in average.

    How are the property prices in Ireland?

    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.

    What is the Rental income tax for foreigners? (Withholding 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.

    Conclusion

    Foreigners have no issues to buy properties 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 highschool or university education, you should definitely have a look at this country.

    As one of the new financial centers (together with London and Frankfurt) you can expect that tons of jobs will move or be created here.

    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 1500 in places like Dublin.

  • 3 Responses to “How Asian Investors Can Buy Property in Ireland: A Complete Guide

    1. Jean Teh at 3:12 pm

      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 !

      Regards,
      Jean Teh

      1. Marcus Sohlberg at 9:23 am

        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.

    2. Phuong Nguyen at 11:10 am

      Dear Marcus,

      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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