Buying and letting a flat in Ireland

stret

Hi,

I'm from Austria and first came to Ireland in 2007 with school for practicing English.
From that point on I had a soft spot for this country and planned to return for holiday somewhen.
Over the last years though, I got more and more fed up with Austria and now I'm thinking of moving to Ireland on a permanent basis.
To start with, I'd like to buy a flat here and let it for some time until I have decided what to do, just to have kind of a backup away from Austria.

I have a few questions regarding this topic:
- can anybody purchase property in Ireland or are there any prerequisites?
- what taxes do I need to pay if I'm purchasing property in Ireland? How much would it be in an area like Waterford for say 50 square meters?
- is it realistic to find tenants who'll stay for some time? It seems to me you guys all want to buy after all ...
- what's the law of tenancy like in Ireland? Is it easy to get rid of bad tenants? Cause in Austria, this can be a big problem
- would there be any trouble with banks if I stay with my Austrian one and the tenant with his/her Irish one?
- what else do I need to take into account?


THANK YOU!

Geuze

stret wrote: »

Hi,



I have a few questions regarding this topic:
- can anybody purchase property in Ireland or are there any prerequisites?
- what taxes do I need to pay if I'm purchasing property in Ireland? How much would it be in an area like Waterford for say 50 square meters?

You can buy a house here.

Purchase tax is 1% stamp duty.

stret

So 1% regardless of the size of the house or the area?
Thank you!

seamusmacc

see below:

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/stamp_duty.html#l62fd2


more info:

http://www.citizensinformation.ie/en/housing/owning_a_home/

stret

thanks

Michael D Not Higgins

Would you be getting a mortgage or paying cash?
If you're getting a mortgage, you'll have to consider whether your Austrian bank will loan for a foreign property or whether an Irish bank will loan to a non-resident.

You would have to pay the local property tax each year which is 0.18% of the property value per annum (up to €1million and 0.2% above)

You would have to register the property with the PRTB as a landlord for the tenancy.

Length of tenancies offered tend to be one year. Many people stay longer but trying to rent long term is less likely, especially for apartments.

The Residential Tenancies Act 2004 is worth a read. It gives tenants power to stay in the property while a case is open for dispute and can take up to a year to evict someone who doesn't want to move and you may not ever see the lost rent if they have no means to repay when brought up in court.

Other places of information:
http://www.citizensinformation.ie/en/housing/renting_a_home/
http://www.irishlandlord.com/
http://www.prtb.ie/

the_syco

stret wrote: »

- can anybody purchase property in Ireland or are there any prerequisites?

In most towns you'll be okay, but in some parts of the country you'll come across silly "locals only" things.

stret wrote: »

- is it realistic to find tenants who'll stay for some time? It seems to me you guys all want to buy after all ...

People want to buy, as most of them have been told that renting long term is silly. Also, there's not much protection for long term renters.

stret wrote: »

- what's the law of tenancy like in Ireland? Is it easy to get rid of bad tenants? Cause in Austria, this can be a big problem

If the tenant stop paying, you cannot evict them, and due process can take a long time.

stret wrote: »

- would there be any trouble with banks if I stay with my Austrian one and the tenant with his/her Irish one?

The tenant would need to deduct 20% from his rent, and give it to the tax man, if landlord lives abroad.

stret wrote: »

- what else do I need to take into account?

Why Waterford?

stret

@Michael D Not Higgins:
Nah, I'd be paying cash. Just thinking of a small flat
Ok, thank you for the further information, especially regarding local property tax and PRTB!


@the syco:
what you mean with locals only things? Some kind of tourist areas where they want to protect the locals from a sell-out?

Ye, that's the difference to Austria, cause most flats are so expensive here, half the people can't afford to buy and rent lifelong.

All right ...

Meh ... so it'll be even more difficult to find tenants but fair enough.

Haha ... it's just I want to live in a city and that's the place where I found the cheapest flats at. Is there anything wrong with Waterford?

athtrasna

If property is cheap there's generally a reason. You need to do a lot of research before you consider where to buy. Both on the rental sector in your considered location and on the realities of living there.

filbert the fox

stret wrote: »

Hi,

I'm from Austria and first came to Ireland in 2007 with school for practicing English.
From that point on I had a soft spot for this country and planned to return for holiday somewhen.
Over the last years though, I got more and more fed up with Austria and now I'm thinking of moving to Ireland on a permanent basis.
To start with, I'd like to buy a flat here and let it for some time until I have decided what to do, just to have kind of a backup away from Austria.

I have a few questions regarding this topic:
- can anybody purchase property in Ireland or are there any prerequisites?
- what taxes do I need to pay if I'm purchasing property in Ireland? How much would it be in an area like Waterford for say 50 square meters?
- is it realistic to find tenants who'll stay for some time? It seems to me you guys all want to buy after all ...
- what's the law of tenancy like in Ireland? Is it easy to get rid of bad tenants? Cause in Austria, this can be a big problem
- would there be any trouble with banks if I stay with my Austrian one and the tenant with his/her Irish one?
- what else do I need to take into account?


THANK YOU!

There is a two tier rental market running in the country at present. If you buy a property and live in it you may take in paying occupiers on a long term basis and pay no tax on up to €12,000 per annum.(Rent a Room scheme)

If you buy a property and rent it out whilst living elsewhere you are now considered to be in business as a landlord/lady and every cent you get in rent is subject to tax. There are some deductions allowable but you can expect to pay at least 35% of the income as tax. :mad:

stret

@athtrasna:

Ye I know. I want to go to Ireland for about two weeks next summer anyway and have a look at a few places just wanted to get as much information as possible beforehand ...


@filbert the fox:

oh man ... I expected that sort of thing
is there any problem with vacancy in Ireland? If I buy a flat, don't live in it permanently but also don't let it, will I be all right or is there a fee to pay for speculation or something?

athtrasna

stret wrote: »

@athtrasna:

Ye I know. I want to go to Ireland for about two weeks next summer anyway and have a look at a few places just wanted to get as much information as possible beforehand ...


@filbert the fox:

oh man ... I expected that sort of thing
is there any problem with vacancy in Ireland? If I buy a flat, don't live in it permanently but also don't let it, will I be all right or is there a fee to pay for speculation or something?

Where property is cheap, high vacancy rates

stret

ok, so to sum things up:

- when I buy a flat, I have to pay 1% stamp duty of the value of the property once
I read that the stamp duty is calculated without VAT - are the prices shown on sites like daft.ie normally with or without VAT?

- then 0.18% local property tax of the value of the property annually
- register the property with the PRTB
- if I let it I can expect that 35% of my income out of rents is subject to taxes
- tenants need to deduct 20% from their rent and give it to the tax man if the landlord lives abroad

anything else?
what about a PPS number? I need one as soon as I own a property, right?

Mrs OBumble

stret wrote: »

- register the property with the PRTB

- if I let it I can expect that 35% of my income out of rents is subject to taxes
- tenants need to deduct 20% from their rent and give it to the tax man if the landlord lives abroad

what about a PPS number? I need one as soon as I own a property, right?

Almost.

You register tenancies with PRTB, not the property itself.

If you aren't tax resident here, then I'm not sure what tax you would be due to pay, apart from the 20% that tenants must deduct, and whatever you have to pay in the country where you are tax-resident. (If tenants pay you through an agent, they don't have to deduct it, but I guess there must be some equivalent procedure for the agent to deduct it before forwarding the cash to you overseas.)

If you are tax resident here, then income tax is very roughly
0% on the first 15k
20% on 15-33k
40% on everything over that.
But there are two other taxes (PRSI and USC) which between them add about 11% to those rates (less at the bottom end - but the scales are different for each type of tax).


You will need to apply for a PPS number as part of the process of buying property here. Welfare/Revenue have a special process for non-residents who are doing this. The solicitor who you engage to represent you in the purchasing will (I think) will help guide you through apply for it.

filbert the fox

stret wrote: »

ok, so to sum things up:

- when I buy a flat, I have to pay 1% stamp duty of the value of the property once
I read that the stamp duty is calculated without VAT - are the prices shown on sites like daft.ie normally with or without VAT?

- then 0.18% local property tax of the value of the property annually
- register the property with the PRTB
- if I let it I can expect that 35% of my income out of rents is subject to taxes
- tenants need to deduct 20% from their rent and give it to the tax man if the landlord lives abroad

anything else?
what about a PPS number? I need one as soon as I own a property, right?

Say you are working and earning €60,000. The "income" from rent is added to this and is subject to taxation at the higher rate (less some allowances i.e. 75% of mortgage interest, depreciation, insurance, letting fees, maintenance etc). It's possible you could be paying half of your rental income in tax .....

newacc2015

Only buy in a large city like Dublin, Galway or Cork. The larger the city, the better they can weather an economic problem eg some smaller towns in Ireland, rely on a large single large multinational or few small ones for a large amount of employment directly and indirectly. If the factory closes, the town can be economic devastated for a while eg Limerick took a large hit when Dell closed.

Personally I would buy in Ireland. The tenancy laws are too tenant orientated. If you have an issue with a tenant, not paying rent. You could be 6 months to several years without any rent

filbert the fox

newacc2015 wrote: »

Only buy in a large city like Dublin, Galway or Cork. The larger the city, the better they can weather an economic problem eg some smaller towns in Ireland, rely on a large single large multinational or few small ones for a large amount of employment directly and indirectly. If the factory closes, the town can be economic devastated for a while eg Limerick took a large hit when Dell closed.

Personally I would buy in Ireland. The tenancy laws are too tenant orientated. If you have an issue with a tenant, not paying rent. You could be 6 months to several years without any rent

you mean you would NOT buy in Ireland.

There are many cases where no problems arise with tenancies . so ?

OreaM

Newacc could you elaborate a bit on that part ?

We have similar tenant protections in my home country, such as not being able to kick out tenants not paying rent if it's winter time etc, and it ends up often with social services being on the landlord's back and drowning him into legal issues whenever this happens.

Also, any idea whether landlord insurances would protect your income from any similar issue?