Buying your first property is an exciting investment opportunity and often a cathartic process for those who have struggled to get onto the property ladder. However, buying a house can also be incredibly stressful, especially if you’re not proficient with property jargon or aware of all the potential fees involved.
Contrary to popular belief, it’s not just the cost of the mortgage you need to consider: there are some necessary, upfront costs that are attached to the property purchase. A first-time buyer who hasn’t gone through the process should be fully prepared for those supplementary charges. Here at McGinley Solicitors LLP, we want to support first-time buyers with a realistic picture of the expenditure they can expect along the way. Here’s a comprehensive guide as to what you should expect.
Conveyancing Fees
Conveyancing is the legal process that transfers the property from the seller to the buyer. It can involve the transfer of deeds, leases and other written documents. There are no set fees for conveyancing, so first-home buyers should speak to an experienced property lawyer who is aware of the need to be competitive and to keep those charges to a minimum.
Conveyancing fees can be charged in two ways:
- As a percentage of the property purchase
- As a flat fee
The flat fee system is simple to understand and the figure shouldn’t be subject to change. With the percentage costs, you need to keep calculating the sums when you find properties and when you enter into negotiations over a purchase price. The flat fee option could be a better choice, but how much are you likely to pay?
As a very general rule, the conveyancing fees in Ireland will range between 1500 and 3000 Euros. When you are looking around for figures, remember to ascertain whether the sums involved include VAT. If this is not explained fully and the VAT is applied at a later date, it can increase your outgoings significantly.
Stamp Duty
For a first-time buyer, stamp duty in Ireland can be a significant sum and it can provide the biggest outlay, outside of the mortgage. Stamp duty is a tax levied on the purchase price of a property and it doesn’t only apply to first-home buyers. As of 2023, the charges for stamp duty in Ireland are:
- 1% up to the first one million Euros
- 2% on any excess sum beyond one million Euros
The majority of first-time buyer purchases for a second-hand house in Ireland will be below the one million euros threshold, so the calculations ought to be quite straightforward.
Let’s say that your first home costs 475,000 Euros. At 1%, the first-time buyer stamp duty charge in Ireland will be 4,750 Euros. That simple calculation can be applied to any property purchase, and you can also contact a solicitor for confirmation of stamp duty rates and exact charges.
Land Registry Fee
There are two types of land registry fees: one charge is made on the transfer of registration, while the other will apply to any mortgage. The majority of first-home buyers are likely to pay both.
Essentially, this is where property ownership is registered and the deeds are filed with the land registry. The process literally confirms that you own your home. For a first-time buyer of a new or second-hand house in Ireland, the mortgage lender will also need to be registered.
Irish law currently places a series of flat fees for land registry and these are as follows:
- Property Value up to 50,000 Euros: Cost = 400 Euros
- Property Value between 51,000 Euros and 200,000 Euros: Cost = 600 Euros
- Property Value between 201,000 Euros and 400,000 Euros: Cost = 700 Euros
- Property Value up in excess of 400,000 Euros: Cost = 800 Euros
There will be an additional, smaller charge on behalf of the mortgage lender.
Other Legal Fees
Another necessary cost relates to search fees. On the day of the transaction, your legal representative will carry out a final search to establish that there are no last-minute difficulties that could affect the sale. Issues could include bankruptcy on behalf of the seller and, while these obstacles are rare, the search is a vital part of the overall sale.
The search fee charge is relatively small in comparison to other associated fees for a first-time buyer, and you may be expected to pay in the region of 150 Euros. Once again, this is a cost that can be confirmed ahead of time by your solicitor.
How to Be Sure of Your Full Legal Costs
At McGinley Solicitors LLP we don’t want the legal process to be daunting for a first-time buyer. You should be able to enjoy looking for a home, as you prepare to focus on those important decisions in regards to finding the property that suits your needs.
Our intention is to make you fully aware of your obligations in terms of legal costs while making our own fees competitive within the industry. We have been in business since 1988, so we know what we need to do in terms of smoothing the legal process for first-home buyers.
The house-buying process in Ireland does come with those necessary fees, so please get in touch and we can advise on the outlay that will be involved with your specific search. You can call us, drop us an email at info@mcginleylaw.ie or alternatively, simply fill in the online contact form and we will get right back to you.
If you wish to proceed with our services, we have three offices based in Dublin and Donegal, so we can be flexible in terms of meeting clients. At the meeting stage, we can confirm the exact costs involved with the house-buying process in Ireland.
We want you to be fully aware of those pesky fees involved with a property purchase, so please get in touch and we can help you with the process, as you look to buy your first home.