Costs Associated With Buying A House
If you are a First Time Buyer, you will already know that this is probably the most expensive purchase you will ever make. Deep Breaths! However, do you know the additional costs associated with buying a house in Ireland? Read my guide below for all you need to know.
The Mortgage Deposit
Most people know they must pay a deposit when buying a house. For first time buyers and movers, this is 10%, meaning you must have 10% of the purchase price available to you. For example, if you are buying a house for €300k, then your deposit is €30k. You must show that you have these funds in your bank accounts, or it can also come from a gift, or both.
You will need a solicitor to look after all the legal aspects of transferring ownership of the property to you. Costs can vary, so it is always good to shop around. Some solicitors charge a flat fee, while others charge a percentage of the purchase price (usually 1% – 2%). Also, make sure they quote you for their costs inclusive of VAT.
Stamp Duty is calculated at 1% of the selling price of a residential property, up to €1m, and 2% on the balance above. If you are buying a house for €300k, the stamp duty you will pay is €3,000. When closing the sale, your solicitor will calculate the amount of stamp duty owed and forward this to the revenue commissioners.
Lenders will look for a report that confirms the value of the property, and that you are paying a fair price to the seller. The lenders have a panel of valuers that they use, and one will be appointed to carry out the report, which you will have to pay for. The fee for this is usually approximately €180.
It is strongly recommended that you get a professional surveyor to check your new home. They will provide a written report on any structural damage or other issues, such as condensation, dampness or dry rot. While this is not a legal requirement, it is definitely recommended, as this report will identify any hidden issues, which could end up costing you more money. You should expect to pay approximately €300 plus Vat for a surveyor’s report.
Mortgage Protection Insurance
The lenders require that you have mortgage protection to cover the outstanding debt in the event that you die before the mortgage is repaid. The premiums can vary depending on your mortgage amount and also you your personal health circumstances. Your broker will advise you on the best rates available to suit your requirements.
Before your mortgage will draw down, you will need to arrange buildings insurance on your property, in the event of a fire or a flood, or if your house falls to the ground. The cost of your insurance will depend on the value of your home, and also the condition and the location of your home. Contents insurance are also sold with buildings insurance to cover your household items and any personal effects.
Local Property Tax
This is an annual self-assessed tax, which came into effect in July 2013. It is charged on the value of your property and is collected by the revenue commissioners. The rates vary depending on the value of your home.
It may be obvious to people that there will be utility costs, such as electricity, gas etc. However, it is worth mentioning, as there may be initial set up costs, and it is always good to shop around to find the best option for you.
Redecoration and Upgrading
Depending on the condition of your home and also your personal choice, you may need to budget for any improvements, such a flooring, painting, upgrading kitchens and bathrooms. This is worth considering when you are choosing your new home.
The process of buying your new home is very exciting. However, it can also be quite a stressful time, so it is always good to be familiar with all the costs associated with buying a house.
If you are looking to discuss your mortgage options, please contact us on 021 425 5822 to arrange a meeting, or send me an email directly at email@example.com and I would be happy to advise you accordingly.