Legal Costs of Buying a House in Ireland

Buying a house in Ireland is an exciting venture, but it comes with a myriad of costs beyond the purchase price. Understanding these expenses, particularly the legal ones, is crucial for effective budgeting and a smooth transaction. This blog post, brought to you by Sherwin O’Riordan Solicitors, will break down the various legal and associated costs you can expect when purchasing a home in Ireland.

Upfront and Deposit Costs

One of the first significant costs you’ll encounter is the deposit. The Central Bank of Ireland generally requires a deposit of at least 10% of the property’s purchase price, though this can be higher for second homes or investment properties. For first-time buyers of newly built homes or those building their own, the Help to Buy (HTB) Scheme can assist with this deposit. This deposit is typically paid in two stages: a booking deposit to reserve the property, and the remainder when contracts are signed. Booking deposits can range from €5,000 to €10,000 and are usually refundable until contracts are signed.

Solicitor and Legal Fees

Engaging a solicitor is essential for handling the legal transfer of property ownership, a process known as conveyancing. Solicitor fees can vary, depending on a number of factors. We pride ourselves on offering competitive and transparent fees. Contact us today for a quote.

Beyond the solicitor’s direct fee, several outlays are involved in the legal process:

• Land Registry Fees:
  • These are paid to the Property Registration Authority (PRA) to register the new ownership and the mortgage (if applicable). Fees vary based on property value, for example, €700 for properties between €201,000 and €400,000, and €800 for those over €400,000. A separate fee of €175 is typically charged to register the mortgage.

• Legal Searches:
  • Solicitors conduct searches to ensure there are no unresolved financial or legal issues with the property, such as planning violations or unpaid charges. These can cost between €200 and €500, with closing searches often around €250.

• Commissioner for Oaths Fees:
  • These fees, typically around €40 to €60, cover the witnessing of statutory declarations.

• Miscellaneous Outlays:
  • These cover administrative costs like postage, telephone bills, and printing, often around €100.

Stamp Duty

Stamp duty is a mandatory tax paid to the government when transferring property ownership. The rates are:

• 1% on properties up to €1 million.
• 2% on the portion exceeding €1 million, up to €1.5 million.
• 6% on any amount over €1.5 million.

For new builds, stamp duty is calculated on the price minus VAT.  Your solicitor will calculate and arrange payment of this tax to Revenue.

Mortgage-Related Costs

If you’re securing a mortgage, several additional costs arise:

• Valuation Fees: Lenders require a professional valuation of the property to confirm its market value before approving the mortgage. This typically costs between €150 and €300.
• Mortgage Protection Insurance: This is a legal requirement in Ireland, paying off the mortgage balance if you die before it’s repaid. Costs vary based on age, health, and coverage, usually between €15 and €50 monthly per person. While lenders must ensure you have cover, you don’t have to purchase it directly through them.
• Home Insurance: Most lenders insist on home insurance to protect the property against risks like fire or theft. This generally covers both the structure and contents, with annual costs typically ranging from €200 to €800. You are free to shop around for the best policy.
• Lender Fees: Your mortgage lender may charge fees for arranging your loan, processing the application, or for a survey to value the property.

Property Condition and Survey Costs

While not legally mandatory, obtaining an independent buyer’s survey is highly recommended to identify any defects or structural issues. This survey is separate from the lender’s valuation. Costs can vary considerably, typically ranging from €300 to €600, but can be higher for larger or older properties. For new builds, a “snag list inspection” (€300-€600) is advisable to identify construction defects before moving in.

Ongoing Property Charges

Once you own the property, you’ll be responsible for:

• Local Property Tax (LPT): This is an annual tax on all residential properties in Ireland, due on November 1st each year. The amount depends on the property’s value. Your solicitor should check for any outstanding LPT before completing the sale.
• Management Fees: If you’re buying an apartment or a house in a multi-unit development, you’ll pay annual management fees to cover the upkeep of common areas. These can range from €500 to over €2,000 annually.

Conclusion

The total cost of buying a house in Ireland extends far beyond the advertised price. By understanding and budgeting for these legal, mortgage-related, and associated expenses, you can navigate the home-buying process with greater confidence and avoid unexpected financial strain. Sherwin O’Riordan Solicitors are here to provide expert guidance and ensure a smooth and transparent legal journey for your property purchase.

Contact Sherwin O’Riordan Property Team Today

Ph: 01 663 2000

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