Can anyone buy property in Ireland and what affect does that have on pricing?

armabelle

I watched a documentary about London real estate prices and how normal working people are no longer able to afford to buy property because off foreign investment in the English property market. Is this also the case in Ireland and are there any laws that actually protect Irish people from this? I hear a lot on the news that their is a problem with supply and that prices are rising very quickly so not sure if the two are tied together and was wondering if the Irish people suffer as a result of this in any way.

Michael D Not Higgins

Preventing another nationality from buying property amounts to discrimination which is illegal.

SarahMollie

London is a unique case for a lot of reasons. Its also a major world city, which Dublin cannot be said to be.
As such it attracts people (many of whom are rich) from accross the world. Same can be said for Tokyo, Singpore, New York etc.... and all of those places have extremely expensive property prices too.

Lumen

The supply problem in Dublin has nothing to do with excess foreign investment in housing (the reverse, if anything), it's a result of deliberate government policy.

Noonan wanted high property prices, Noonan got high property prices.

seamus

Michael D Not Higgins wrote: »

Preventing another nationality from buying property amounts to discrimination which is illegal.

Well, yes and no.

Requiring someone to be resident in order to purchase property would not be discrimination.

However, it wouldn't really solve the problems that foreign investors cause, since companies can own properties. You can't stop a resident shell company from purchasing property on "behalf" of a foreign investor.

As pointed out, foreign purchasers aren't the current problem in the Irish market; constricted supply is.

SB_Part2

There's parts of Galway that you can only purchase if you're a native to Galway.

SarahMollie

SB_Part2 wrote: »

There's parts of Galway that you can only purchase if you're a native to Galway.

Is that not more about building a house? I know its that way in other counties. Something about trying to control the number of one off houses being built (which is a good thing).

Michael D Not Higgins

SarahMollie wrote: »

Is that not more about building a house? I know its that way in other counties. Something about trying to control the number of one off houses being built (which is a good thing).

Yes planning in Wicklow is similarly strict for the same reason.

bleary

The UK had very advantageous tax breaks for so called non doms. This meant that people could register as non domiciled and could pay no tax on foreign income. They changed the rules slightly in the last few years so now instead of no tax, you have to pay 30,000.

For example zac goldsmith conservative candidate for London mayor was a registered non dom. His trust fund was foreign income so he could technically pay no tax on any income from it.
This tax policy has worked as a huge incentive to foreign property investors into the uk.

Ireland doesn't have an equivalent policy afaik

SB_Part2

SarahMollie wrote: »

Is that not more about building a house? I know its that way in other counties. Something about trying to control the number of one off houses being built (which is a good thing).

Yeh you could be right about that. I was under the impression that I couldn't buy any house that was built on the land either since I wasn't a local but that could have been the estate agent just fobbing me off.

armabelle

Lumen wrote: »

The supply problem in Dublin has nothing to do with excess foreign investment in housing (the reverse, if anything), it's a result of deliberate government policy.

Noonan wanted high property prices, Noonan got high property prices.

deliberate goverment policy why? to shaft the people?

Marcusm

bleary wrote: »

The UK had very advantageous tax breaks for so called non doms. This meant that people could register as non domiciled and could pay no tax on foreign income. They changed the rules slightly in the last few years so now instead of no tax, you have to pay 30,000.

For example zac goldsmith conservative candidate for London mayor was a registered non dom. His trust fund was foreign income so he could technically pay no tax on any income from it.
This tax policy has worked as a huge incentive to foreign property investors into the uk.

Ireland doesn't have an equivalent policy afaik

A little learning is a dangerous thing. Non dome are taxed on a remittance basis both in IrelNd and the U.K. for non Irish/UK income (same in both). If Zac Goldsmith remits his foreign income to the UK, he pays UK tax on it. The 30k domicile levy introduced about 10 years ago simply makes that a minimum payment. Non done in Ireland don't have to pay 30k to keep non Dom remittance basis, ie Ireland is more lax.

Foreign investment in UK property has ramped up over the past 10-15 years as a store of value for those who do not want to or cannot access offshore bank accounts, such as because of the FATCA rules.

Mrs OBumble

SarahMollie wrote: »

Is that not more about building a house? I know its that way in other counties. Something about trying to control the number of one off houses being built (which is a good thing).

That is true.

But there's also another side: Every so often a local estate agent advertises for properties and specifically promises a discrete "no advertising" approach.

Under this, interested buyers are located through personal networking only. Family and friends and neighbours are key to finding prospective purchasers.

The nett effect is that blow-ins in general, and foreigners in particular, are unable to purchase certain houses because they never find out that the house is for sale.

Some people will say that this cannot possibly happen, and that the lack of competition would artificially keep property prices down. However the other side is that some people are prepared to pay a premium for living in an area where this approach is at work.

mahoganygas

armabelle wrote:

I watched a documentary about London real estate prices and how normal working people are no longer able to afford to buy property because off foreign investment in the English property market. Is this also the case in Ireland and are there any laws that actually protect Irish people from this? I hear a lot on the news that their is a problem with supply and that prices are rising very quickly so not sure if the two are tied together and was wondering if the Irish people suffer as a result of this in any way.

When a property is bought by a foreign investment vehicle it is not plucked up and shipped abroad. It is rented to people living in Ireland. It has a net impact of zero on the number of properties available in Ireland.

The normal working people who you mention are probably tenants in these properties. It reduces the number of houses available to buy buy increases the number of houses available to rent.
If you would rather have an Irish landlord instead of a foreign landlord then you are effectively promoting protectionism.

Michael D Not Higgins

mahoganygas wrote: »

When a property is bought by a foreign investment vehicle it is not plucked up and shipped abroad. It is rented to people living in Ireland. It has a net impact of zero on the number of properties available in Ireland.

The normal working people who you mention are probably tenants in these properties. It reduces the number of houses available to buy buy increases the number of houses available to rent.
If you would rather have an Irish landlord instead of a foreign landlord then you are effectively promoting protectionism.

What the OP is referring to is what happens in London. A new apartment block is built, bought by foreign investors and left in a new condition as an investment. They don't rent it out, it's an investment to be sold as new a few years down the line.

To be fair, London's market is a different ballgame. The price of central London property is out of the reach of the common man anyway.

Lumen

armabelle wrote: »

deliberate goverment policy why? to shaft the people?

To keep the banks solvent, to reduce negative equity and strategic defaults.

There are many TDs and well connected people with large property exposures, still. Not Noonan though, in fairness. I think he sticks to ETFs these days.

MarkAnthony

armabelle wrote: »

I watched a documentary about London real estate prices and how normal working people are no longer able to afford to buy property because off foreign investment in the English property market. Is this also the case in Ireland and are there any laws that actually protect Irish people from this? I hear a lot on the news that their is a problem with supply and that prices are rising very quickly so not sure if the two are tied together and was wondering if the Irish people suffer as a result of this in any way.

I wonder how the Bulgarians felt during the tiger! :pac:

MarkAnthony

Michael D Not Higgins wrote: »

To be fair, London's market is a different ballgame. The price of central London property is out of the reach of the common man anyway.

An hours commute can put you within the affordable zone. In Dublin an hours commute from the City Centre puts you in the Phoenix Park! :pac:

Hollister11

armabelle wrote: »

I watched a documentary about London real estate prices and how normal working people are no longer able to afford to buy property because off foreign investment in the English property market. Is this also the case in Ireland and are there any laws that actually protect Irish people from this? I hear a lot on the news that their is a problem with supply and that prices are rising very quickly so not sure if the two are tied together and was wondering if the Irish people suffer as a result of this in any way.

What documentary?

Darkglasses

Michael D Not Higgins wrote: »

Yes planning in Wicklow is similarly strict for the same reason.

Yeah common in Wexford too, you can check your county development plan for areas that require "rural linkages" in order to get planning permission.

newacc2015

UK property was super attractive as an investment, as non-residents didnt pay CGT on the sale where as in Ireland a non-resident pays 33% on the sale of a property.

Another massive issue with London is dirty money. A lot of people will tell you property is being purchased in the UK with proceeds from drugs, corruption, crime etc. Where as there is more checks on that here. A lot of people buying London property are using proceeds from crime

Carawaystick

Darkglasses wrote: »

Yeah common in Wexford too, you can check your county development plan for areas that require "rural linkages" in order to get planning permission.

But there's no restrictions on buying agricultural land or pretty much any type of land that's not a residential dwelling, and those restrictions are rare.
Also anybody can buy chattels in Ireland, but I don't think the op was worried about that type of property.

Darkglasses

Carawaystick wrote: »

But there's no restrictions on buying agricultural land or pretty much any type of land that's not a residential dwelling, and those restrictions are rare.
Also anybody can buy chattels in Ireland, but I don't think the op was worried about that type of property.

Sorry, I was talking specifically about getting planning permission for new builds, not buying land.

ohnonotgmail

SB_Part2 wrote: »

Yeh you could be right about that. I was under the impression that I couldn't buy any house that was built on the land either since I wasn't a local but that could have been the estate agent just fobbing me off.

the planning permission for the house could have had a clause that prevents the sale of the house to an outsider for a set number of years after it is built.

seamus

ohnonotgmail wrote: »

the planning permission for the house could have had a clause that prevents the sale of the house to an outsider for a set number of years after it is built.

Not legally enforceable really.
The council cannot block a sale of property from one private individual to another.

It probably doesn't stop them trying, but if they were to bring someone to court they would find themselves very quickly squashed by article 43 of the constitution.

Planners and councils cannot tell you who you may or may not sell property to.

Theoretically the planning approval may include a clause that requires the property may not be sold at all for a number of years. But if they sold, the council would have to take the original owner to court for breach of planning. The new owner would be unaffected.

It is very common for rural estate agents to say that the property is not for sale to outsiders because small rural towns are weird and don't want outsiders. The vendor themselves wants the property to go to a local and not some blow-in.

ohnonotgmail

seamus wrote: »

Not legally enforceable really.
The council cannot block a sale of property from one private individual to another.

It probably doesn't stop them trying, but if they were to bring someone to court they would find themselves very quickly squashed by article 43 of the constitution.

Planners and councils cannot tell you who you may or may not sell property to.

Theoretically the planning approval may include a clause that requires the property may not be sold at all for a number of years. But if they sold, the council would have to take the original owner to court for breach of planning. The new owner would be unaffected.

Does planning permission for a one-off not create a contract between the authority and the house builder?

seamus

ohnonotgmail wrote: »

Does planning permission for a one-off not create a contract between the authority and the house builder?

Contract? No. The creation of planning permission and the rules governing what the council may do and what the builder is obliged to do, are covered by the planning laws and regulations.

It's not a contract law issue at all.

SarahMollie

seamus wrote: »

Not legally enforceable really.
The council cannot block a sale of property from one private individual to another.

It probably doesn't stop them trying, but if they were to bring someone to court they would find themselves very quickly squashed by article 43 of the constitution.

Planners and councils cannot tell you who you may or may not sell property to.

Theoretically the planning approval may include a clause that requires the property may not be sold at all for a number of years. But if they sold, the council would have to take the original owner to court for breach of planning. The new owner would be unaffected.

It is very common for rural estate agents to say that the property is not for sale to outsiders because small rural towns are weird and don't want outsiders. The vendor themselves wants the property to go to a local and not some blow-in.

Erm, this may be a bit of a grey area. When I was house hunting, I looked at some ex council stock around Dundrum/Windy Arbour.

One house had been bought from the council, and there was some clause in it that the vendor could only resell to an owner occupier for a period of X number of years, so the estate agent had to quiz me to ensure that I'd no plans to rent it out. Apparently if I'd bought it, the restrictions wouldnt have carried through to me, and I could have resold to whoever I wanted.

So surely it is possible to impose restrictions on the resale of a property?

That said, I didnt like the house, really expensive and huge project, so it was a non issue for me.

ohnonotgmail

seamus wrote: »

Contract? No. The creation of planning permission and the rules governing what the council may do and what the builder is obliged to do, are covered by the planning laws and regulations.

It's not a contract law issue at all.

from a quick google it seems that such a clause could be enforceable.

Section 39 of the Planning and Development Act 2000 provides that a condition attached to a grant of planning permission for a house may specify that the house must be occupied by persons of a particular class or description, that is, an occupancy condition, with provision to that effect to be incorporated in an agreement under section 47 of the Act.

https://www.kildarestreet.com/sendebates/?id=2013-03-06a.424

seamus

SarahMollie wrote: »

One house had been bought from the council, and there was some clause in it that the vendor could only resell to an owner occupier for a period of X number of years, so the estate agent had to quiz me to ensure that I'd no plans to rent it out. Apparently if I'd bought it, the restrictions wouldnt have carried through to me, and I could have resold to whoever I wanted.

So surely it is possible to impose restrictions on the resale of a property?

ohnonotgmail wrote: »

from a quick google it seems that such a clause could be enforceable.

https://www.kildarestreet.com/sendebates/?id=2013-03-06a.424

I'll note at the outset that this is all just waxing lyrical on my part. There's always going to be a disconnect between what's being done and what's strictly allowed.

Taking the law and the constitution together as one, it's clear that you can restrict the resale of a property, if such a restriction is for the greater good of the local area.

So stating that the property must be sold to an owner-occupier, or must be sold to a professional (doctor, solicitor), are perfectly valid applications of this law.

But stating that it may only be sold to someone with roots in the area, is not. It doesn't serve any social purpose, in fact one could argue that it's socially damaging.

But that doesn't mean they don't do it anyway - very few people are going to have the time, money or interest in taking the council to court so they can buy a house. They'll just go find something else.

Carawaystick

The planning restictions are pretty unenforcable.
Say there was a local owner occupier condition.
Person buys the house. doesn't repay the mortgage.
Bank gets a reposession order.

Bank can't own the land because its incorporated away up in Dublin, and also is not an occupier? Don't think so.