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Investment climate and market trends
Both the commercial and residential marketplace in Ireland are expected to remain strong in 2019. Ireland’s residential real estate market remained steady in 2018, with the national residential property price index increasing by 8.44 percent (adjusted for inflation) between January 2018 and October, 2018, according to the Global Property Guide.
Specifically, house prices rose by 8.57 percent (7.61 percent inflation-adjusted) and apartment prices in Ireland rose by 9.74 percent during the year to October 2018 (8.77 percent inflation-adjusted), according to the Global Property Guide. Residential properties are expected to continue to increase in value as supply catches up with demand and the labor market tightens further, according to Standard & Poor.
As for commercial real estate, experts predict a robust 2019. National investment deals greater than €1million ($1.13 million) in Ireland’s commercial property investment market totaled close to €600 million ($675 million) in the first quarter of 2019, according to the World Property Journal.
Whether it’s for business or residential purposes, the process of buying real estate in Ireland isn’t as difficult as one might imagine it would be for non-residents. There are considerations, however, that potential buyers should understand when purchasing property in Ireland.
Most importantly, potential American buyers should retain an experienced Irish attorney, a “Solicitor,” with experience in handling real estate transactions, who can guide you through the process and work to ensure that your best interests are protected.
Any restrictions on non-residents buying property in Ireland?
Taxation should also be considered at the outset to include most tax-efficient structure to hold property. Due to the influx of foreign investment and market experience in the period since the economic downturn, there are a number of structures that can be considered dependent on the level of investment. A broad outline of tax consideration is set out below.
The purchasing process
Typically, a property is identified, potentially through an agent, and terms such as price, closing timeframe etc. are agreed and are committed to a non-binding “Heads of Terms/HOT” and typically a refundable “booking deposit” is paid. Once the HOT is agreed and the booking deposit paid, contacts will issue to the attorney/solicitor retained by the buyer. The completion of the purchase from HOT to closing the deal and getting possession of the property can take six to eight weeks for residential real estate, assuming no delays or complications. This period is likely to be longer if finance is required and 12 to 16 weeks is more realistic for non-resident purchasers and this timeframe should apply to commercial real estate.
Why do I need a Solicitor for a real estate transaction?
A Solicitor works on the buyer’s behalf and handles all legal formalities throughout the real estate purchase process. The main areas in which a Solicitor advises are title/planning, due diligence, negotiation of terms of the contract, completing the transaction payment of stamp duty, transfer of ownership and registration of ownership post-completion. The Solicitor will review any existing leases and advise its terms and any pitfalls. The Solicitor will also advise on management structures where the property is part of a larger structure (apartment block/ large building, etc.).
The transaction is typically conditional on a satisfactory architect’s report on the property’s structure and a bonded surveyor/architect is retained for this purpose.
Registration of ownership—On completion, your Solicitor will pay the balance of the purchase funds on your behalf, which will also include any apportioned amounts relating to annual service charge for the property (where the property is located in a managed estate and a management company manages the common areas of the estate) and local property tax. Once the transaction has completed, your Solicitor will pay the stamp duty for the property on your behalf and register the purchase deed in the relevant property registration authority.
Other points for consideration
Whether you are looking to buy residential or commercial real estate in Ireland, Americans and other non-residents will benefit from the guidance of an experienced real estate Solicitor with knowledge of local regulations, and who will negotiate on your behalf and protect your best interests.