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Property Law Property Purchases and Sales

Buying Property in Ireland from Abroad-What You Need to Know

buying irish property from abroad

Thinking about buying property in Ireland? You are living outside Ireland? Or you are not an Irish citizen?

Firstly, the good news is that there is no restrictions on non Irish citizens buying property in Ireland; and this applies whether you are an EU national or a non-EU national.

The bad news, however, is that ownership of property does not entitle you to reside in Ireland. The whole area of visas, residency, immigration, work permits, asylum is a complex one and you will find more information about these topics on the Irish Naturalisation and Immigration Service website.

If you intend letting the property, and there is a very healthy residential letting market in Ireland in 2018, the tenant is obliged to withhold 20% of the annual rent and pay it over to the Irish tax authorities, the Revenue Commissioners, unless you have appointed a collection agent. The collection agent-someone like an accountant, solicitor, or estate agent-will be liable for making the tax returns on the rental income but you will have been obliged to register with the Revenue Commissioners for tax purposes prior to purchase anyway.

Property taxes

On purchasing a residential or commercial property in Ireland you will have to pay stamp duty. This is currently 1% on residential properties and 6% on commercial properties and for your solicitor to do your stamp duty return he will need a PPS or tax number for you. If you are non resident and have never had a PPS or tax number you will need to apply for one from the Department of Social Protection. You can learn more about applying for a PPS number here.

Once you buy your property you will have Local Property Tax (LPT) to pay; the amount will depend on the value of the property. You can learn more about local property tax here.

If you buy a commercial property you pay commercial rates to the local authority instead of LPT.

Buying a property in Ireland-some practical steps

One of the first things you will need to consider is instructing a solicitor to act on your behalf. Your solicitor will be able to explain how the conveyancing process works in Ireland, the various steps in a conveyance, the legal difference between a booking deposit and contract deposit, and the legal costs and outlays you will encounter.

You will also be advised to engage the services of a structural surveyor to check the structural integrity of the property, check for signs of pyrite, and check the boundaries on the ground as compared to the Property Registration Authority folio map/filed plan.

You should be aware, too, of the differences between buying a house as opposed to an apartment; the most important one will be that a management company will need to be in place to manage the common areas in a multi unit development such as an apartment development.

Property purchase costs and outlays

When budgeting for your purchase you need to account for:

  • Professional legal fee
  • Value added tax on the legal fee
  • Property registration authority registration fees
  • Structural survey
  • Legal searches to be carried out on closing day to ensure there are no judgments or other unexpected burdens registered on the folio
  • Commissioner for Oaths fees
  • Stamp duty on purchase price

Conclusion

There is no difficulty buying property in Ireland but you will need to obtain a PPS/tax number from the Revenue Commissioners and engage the services of a solicitor early in your search.

Make sure you are dealing with a registered auctioneer/estate agent and that he/she is registered with one of the accredited auctioneering bodies in Ireland and he/she is registered with the Property Services Regulatory Authority.

Good luck!

Categories
Business and Company Law Property Law Property Purchases and Sales

How to Become a Licensed Property Services Provider

From May, 2012 a new body, the Property Services Regulatory Authority (PSRA) has been set up to regulate the provision of property services in Ireland.

This new body covers auctioneers/estate agents, property management service providers, and letting agents.

Anyone providing property services in Ireland requires a licence and is leaving themselves open to up to 5 years in prison and an unlimited fine if they provide property services without one.

A separate licence is required for each property service.

There are a number of different application forms depending on whether you are a sole trader, independent contractor, company or partnership.

The Property Services (Regulation) Act 2011 is the relevant piece of legislation which you can find at www.IrishStatuteBook.ie and the PSRA (www.NPSRA.ie ) have produced a booklet explaining the whole procedure together with the application forms and notes to help you with filling out the application.

Sole Trader/Independent Contractor Example

The following comprises the main requirements for a sole trader/independent contractor but is not comprehensive or exhaustive.

Please refer to the guide here. ..Guide to Becoming a Licensed PSP

Your application would be as a sole trader or independent contractor (depending on whether you have employees or not) and the main requirements are as follows:

  • A completed and signed Application Form (PSRA/LA 3)
  • Evidence of your qualification(s) or necessary experience (see below)
  • Evidence that the required level of Professional Indemnity Insurance, which covers both the employer and employees, is or will be available to you,
  • Accountants Report,
  • Tax Clearance Details,
  • Certificate of Business Name Registration (only required if you intend using a business name-it is not necessary to trade under a business name but if you choose to do so the business name will have to be registered),
  • Prescribed Licence Fee (€1,000),
  • Passport size photograph,
  • Compensation fund contribution of €200.

The necessary experience required is that you have held an auctioneer’s licence for three out of the last five years.(This is not now the case-see the amendment below which points up the difference between the booklet published by PSRA and the published regulations covering the qualifications requirement)

The level of professional indemnity insurance cover which must be provided for is as follows:

“the amount insured for each and every claim (exclusive of defence costs) must be at least twice the business’s annual fee turnover (exclusive of VAT) in the previous fiscal year subject to a minimum cover of €500,000 (five hundred thousand euro), with no limit on the number of claims in any one year.”

Hopefully this article together with the guide above will give you a good understanding of what is now required to become a licensed property services provider in Ireland.

Update 18th June, 2012

The PROPERTY SERVICES (REGULATION) ACT 2011 (QUALIFICATIONS) REGULATIONS 2012 sets out the qualifications requirements for applicatnts for the various licences and were published on 5th June 2012.

These regulations appear to different significantly from the booklet published by the PSRA as the regulations now give some discretion to the PSRA in relation to the applicant proving he/she has attained the minimum qualification requirements.

Here is an extract:

“minimum qualification requirements”, in relation to an application for a
licence, means—
(a) the applicant has, in respect of the subject areas specified in the Schedule, successfully completed a course of studies which has led to the
awarding to him or her, by a nationally recognised awarding body or
awarding bodies, of 120 ECTS compatible higher education and training credits at levels 6 to 10 of the framework of qualifications (in this
definition referred to as the “Irish framework”),

(b) the applicant has, in another jurisdiction, in respect of the subject
areas specified in the Schedule, successfully completed a course of
studies which has led to the awarding to him or her, by a body or
bodies in that jurisdiction that is or are equivalent to a nationally
recognised awarding body or awarding bodies, credits, under a framework in that jurisdiction that is equivalent to the Irish framework,
equivalent to levels 6 to 10 of the Irish framework,
(c) the applicant has lawfully engaged in, and for periods amounting
together to not less than 3 years of the 5 year period immediately
preceding the making of the application, the provision of the property
service for which he or she is seeking the licence, or
(d) the applicant has such other qualifications or experience, or both,
which, although not falling (or fully falling) within paragraph (a), (b)
or (c), satisfies the Authority that the applicant is suitable to provide
the property service for which he or she is seeking the licence

The PSRA application form for a sole trader/independent contractor now refers to “evidence of my engagement full time in the provision of Property Services for 3 of the last 5 years” which is a significant difference from page 13 of the PSRA booklet which states:

In the case of a Sole Trader or Independent Contractor evidence that the applicant was the holder of a licence or permit issued under the Auctioneers and House Agents Acts 1947 to 1973 for three of the five years immediately preceding the making of the application.