Hidden costs when buying a new home

Are you a first time buyer and thinking of making your first purchase soon? You might want to consider the costs which will arise so that you can ensure to budget wisely for when the important day comes! Read below for some things to consider.

Most people are aware of the additional costs when buying a new home. They include:

• Stamp Duty- 1% of the cost of residential property (for values up to €1 million)

• Mortgage Associated Costs – getting an auctioneer’s valuation of the property and putting life insurance and home insurance in place are all typical pre-conditions on a bank’s Letter of Offer and these costs are borne by the borrowers.

However there are some costs which often come as a surprise to first time purchasers when they come to me and I have outlined some of the main ones here:

  1. Engineer: The principle of “caveat emptor” or “buyer beware” applies to second hand properties in Ireland. This means that the purchaser needs to ensure that second hand properties are in good structural order before they sign contracts and the qualified person to do this is an engineer who should be engaged to provide a structural report. An engineer usually charges in the region of €300- €500 and this cost is often a surprise to cash-poor purchasers!

It is true that if the engineer does uncover issues which cause the purchaser not to proceed with signing contracts then the engineer’s fees can be seen by some as a waste of money. However we would strongly recommend that a second hand property be checked by an engineer- the cost of doing so at the outset can be very small compared to the cost of purchasing a property with nasty hidden surprises and finding it is too late to withdraw from the sale.

You do not want to end up like Tom Hank’s character in the 1980’s film The Money Pit!

In addition to carrying out a standard survey, your Architect/Engineer should also check the following:

• Compliance with Planning/Building Regulations;

• That the boundaries to the property correspond with the title map

• That the roads and services are contained within the site or alternatively have been taken in charge by the local authority;

• Carry out a Planning Search of the area to disclose any pending planning/re-zoning application in the vicinity of the property and to ensure that there are no enforcement notices issued against the property; and

• Check if the property is situated in a flood plane or there is any record of the property flooding.

  1. Land Registry Fees to register your ownership and the mortgage deed in the Land Registry after completion.

The fee to register the mortgage deed is €175 regardless of the value of the mortgage.

The fees to register purchasers’ ownership increase as the value of the property increases:
Value of Property Land Registry Fee

Up to €50,000 €400
€50,001-€200,000 €600
€200,001- €400,000 €700
Over €400,000 €800

  1. Local Property Tax – the purchaser is responsible for payment of the Local Property Tax from the date of closing of the sale to the end of the year in which the purchase is made. This varies depending on the value of the property and starts at €90 for very low value properties- generally a purchaser should budget for in or around €200-€300 for this.

  2. Closing Searches- on the day of completion the purchaser’s solicitor will conduct various searches against the vendors and the property to ensure that there are no new encumbrances affecting the property– searches are made in the Land Registry, the Bankruptcy Office, Personal Insolvency Office etc. These searches cost in the region of €250.00.

Please feel free to contact one of the team here if you are thinking about purchasing a new home- we have years of experience and will be happy to help guide you through this important time. Best of luck!

Can anyone make a valid will?

Under Irish law in order to make a valid Will a person must:

a) Be eighteen years of age or be or have been married.
b) Be of sound disposing mind.

Paragraph a) is reasonably clear. Paragraph b) is more interesting.

Over the years the Courts have developed a test for the concept of sound disposing mind and it has three parts:

i) A person must understand that he or she is making a Will, i.e. that it is a document that will dispose of their assets on their death.
ii) The person must be capable of knowing the nature and extent of their estate, i.e. their property. This includes land, houses, shares, bank accounts cash etc.
iii) The person must be able to consider persons who might be expected to benefit from their estate and to decide whether or not to benefit them.

It should be noted that despite the well-worn phrase “being of sound mind and body” there is no requirement regarding physical health when it comes to making a Will.

It should also be noted that the law recognises that a person may have a “lucid interval”. For example a person may have a mental condition affecting their capacity some or even most of the time. However if the condition is such that at times capacity returns, a Will made during one of these periods would be valid.

When a solicitor is making a Will for an elderly or infirm person it would be quite normal to ask the person’s medical practitioner to meet with the person first and give a report as to their mental state. Not having such a report does not invalidate a Will but having such a report is a good way to avoid potential disputes.

Once a person executes a Will in accordance with the legal formalities regarding witnesses etc. set out in the Succession Act it is presumed by law that he or she had capacity. It is therefore up to anyone challenging the Will to offer evidence in Court and prove that the person did not have capacity.

If you have any questions on the above, do not hesitate to contact our solicitors at 062 61288 or 052 7441244