What you need to know before buying property in Ireland

27 February 2019

Author: Oliver Tighe
Practice Area: Real Estate
Sector: Brexit


With less than two months to go before the UK is scheduled to leave the EU, many Northern Ireland residents and businesses are considering setting up a base in Ireland to ensure they continue to have a geographical foothold in the EU post Brexit. However NI based purchasers acquiring property in this market will discover that there are some differences in the conveyancing processes between both jurisdictions.

Tax Reference Number

Firstly, it is a legal requirement for purchasers – both residential and commercial - to submit a valid Irish tax reference number as part of their stamp duty return to the Irish Revenue post completion.Without this number a purchaser will be unable to register its interest in the property with Land Registry.

Property Tax

When it comes to property taxes there are five that you should be aware of.

  1. Stamp Duty in Ireland is the equivalent to UK Stamp Duty Liability Tax (SDLT).The following rates apply. For residential property up to €1 million it is 1%, over €1 million it is 2% and for all non-residential property the rate is 6%.
  2. Local Property Tax (LPT) is equivalent to NI domestic property rates. LPT is a self-assessed tax charged on the market value of domestic properties. The rates are dependent on the value of the property and are in part determined by local councils so can differ from area to area.
  3. Commercial rates are equivalent to NI commercial rates and applies to non-domestic properties. It is payable to the local council and is based on the rateable valuation of the property. The rateable valuation is determined by the Commissioner of Valuation.
  4. The VAT regime is broadly similar to that of the UK in that VAT is only charged on what is considered a new property. The rate for property is 13.5% as opposed to 20% in the UK.
  5. Water charges for commercial properties are broadly similar to NI water charges. For domestic properties, a new charge will be payable from July 2019 for excessive water usage only. It is anticipated that the bulk of properties will not exceed the stipulated thresholds for what is considered excessive usage based on current household consumption levels.

Contract Deposit

The Law Society of Ireland Contract for Sale provides if that the purchaser fails to complete on the stipulated closing date then the seller is entitled to serve a ‘Completion Notice’ giving the purchaser 28 days (as opposed to 5 days in Northern Ireland) to complete.In the event that the purchaser fails to complete within this notice period then the seller is entitled to forfeit the purchaser’s contract deposit.The contract deposit being 10% of the purchase price.

Planning and Building Regulations

Unlike the position in NI there is no legal requirement for any statutory agencies such as Building Control to visit and inspect premises during the course of construction or at completion. Instead a purchaser will rely on certificates of compliance with building regulations and planning from architects and engineers together with any structural survey they have had carried out.It is vital that a prospective purchaser reviews the merits of the qualifications and experience of the certifying professionals, and also ensures that they have adequate professional indemnity insurance in place.

As per the position in Northern Ireland, the principle of caveat emptor applies when purchasing a second hand property.Therefore, a purchaser should ensure that a full structural survey is carried out prior to exchange of contract.