Saving money to buy your first house can be challenging, and there are many additional costs to take into account other than the deposit and mortgage payments. It’s essential to be financially prepared for all the potential expenses involved with the home-buying process.
Whether you are a first-time buyer, a second, or a subsequent buyer, raising at least 10% of the value of a new house is the minimum requirement for getting on the housing ladder. So if a property is worth €200,000, it will require savings of at least €20,000.
In addition to the purchase price of the property and deposit, if that’s the case, here are some extra costs to consider:
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Stamp Duty
When you transfer ownership of property in Ireland, you must pay Stamp Duty to Revenue. For residential properties, the first €1 million is subject to a 1% stamp duty, while the subsequent €1 million is subject to a 2% stamp duty. So if you spend €300,000 on a home, your stamp duty will be €3,000.
If the property is brand new, the stamp duty is equal to the home’s value minus the applicable VAT, which is presently 13.5%. The stamp duty you will be required to pay is €2,595 if you buy a new house for €300,000.
You don’t need to do anything other than have the money to pay the Stamp Duty as your solicitor will make the necessary arrangements for payment to Revenue.
Legal Fees
You’ll need a solicitor to look after all the legal aspects of the property purchase. Their fees can vary, so it’s a good idea to get quotes from different professionals.
Some solicitors will charge a flat fee, while others will charge a percentage of the house price, usually around 1% or 2%. You can expect to pay anything from €2,500 to €3,000. Always make sure the fee is VAT-inclusive.
We’re in a position to provide recommendations based on our collaboration with a solicitor practice, which includes a prearranged pricing agreement.
Surveyors fees
Although it is not required by law, it is a good idea to hire a surveyor to inspect your new property, especially because purchasing a home is a substantial investment. You’ll want to be aware of any potential structural problems that might not be immediately obvious to you.
In addition to looking for hidden defects or structural issues, the surveyor will also look for things like dampness, subsidence, and dry rot.
Getting a negative report doesn’t necessarily mean you can’t buy the property. It just means you know exactly what you’re buying before you make a huge financial commitment.
Also, you can use the surveyor’s report to help you negotiate a price with the seller and get a clear estimate of the cost of repairing any potential issues. A surveyor may cost between €300 and €500 plus VAT at 23%.
If the property is more than 100 years old, the lender will require a copy of the survey. Additionally, if the survey identifies any necessary repairs, the lender will ask for evidence of funds to cover these repairs, along with cost estimates.
Valuation Fees
Your lender will ask for a valuation report to make sure you’re not overpaying for your new home. A valuation report provides your lender with an estimation of the property’s market value.
The valuation must be conducted by a valuer who is part of the lender’s approved panel. Once you reach this stage, your mortgage advisor will provide guidance on the process for requesting the valuation.
You are responsible for paying for the valuation report. You can expect to pay between €170 and €200 for this.
The valuation remains valid for a period of 4 months, and there might be a need for a new valuation report before the drawdown if your original valuation has expired.
Property Tax
Your property is liable for Local Property Tax (LPT) if it is a residential property. The amount is calculated based on the market value of the property.
Because LPT is a self-assessed tax, the value of your property must be self-assessed in order to calculate the annual LPT payment.
Revenue provides information on their website to help you determine the value of your property.
Mortgage Protection Insurance
Anyone taking out a mortgage is required by their lender to have mortgage protection in place. Mortgage protection insurance is a type of life insurance designed to provide coverage for the outstanding mortgage balance in the event of the policyholder’s death during the term of the mortgage.
Though it’s common for people to get mortgage protection from their mortgage provider or bank, it’s always a good idea to shop around.
Because we have access to all mortgage protection providers, when you buy mortgage protection insurance with LowQuotes, you can save up to 30% as we compare mortgage protection from all of them to get you the best deal. Our mortgage protection quote calculator will give you an idea of the cost of the coverage you will need.
If you want to have a better understanding of mortgage protection, read our articles:
- Mortgage Protection Insurance in Ireland: Everything You Need to Know
- Exploring The Myths About Mortgage Protection Insurance In Ireland
- What’s The Difference Between Mortgage Protection And Life Insurance?
Renovation, Repairs, and Decoration
When buying a house, it’s essential to budget not only for the purchase price but also for potential renovation, decoration, and repair costs. While new houses are generally in good condition, there might be certain changes you’d like to make to personalise the space or address any specific needs.
The cost of this work will vary depending on the condition of the house, whether you need little things like furniture or larger and more expensive items like a new kitchen or bathroom. And if your new home doesn’t come furnished, you may need to budget for purchasing all the furniture and appliances.
Choosing a lender that gives cash back can help you pay for your renovation, repair, or decoration projects.
Shannon is a first-time buyer from Dublin who recently bought her first home with her boyfriend, Dan. They bought their house in Dun Laoghaire, which needed a lot of work, so the pair decided to do a complete renovation.
Watch Shanon’s journey on how they started renovating a fixer-upper:
Episode 1: https://www.aviva.ie/blog/property/home-buyer-vid-s01-e01/
Episode 2: https://www.aviva.ie/blog/property/home-buyer-vid-s01-e02
Episode 3: https://www.aviva.ie/blog/property/home-buyer-vid-s01-e03/
Episode 4: https://www.aviva.ie/blog/property/home-buyer-vid-s01-e04/
Moving Costs
When buying a house, it’s important to consider the various moving costs involved with the relocation. These costs can vary based on the distance, the number of belongings you have, and whether you choose to hire a moving company or do it yourself.
Planning ahead and getting quotes from different moving companies can help you get a clearer picture of the expenses involved in the relocation process and be financially prepared.
Why you should get your mortgage with LowQuotes
Low Quotes is a market-leading online Mortgage broker in Ireland with over 800 5-star Google ratings and 25 years of experience. We are proud to be awarded Insurance Broker of the Year 2022 as the result of our team’s dedication to providing market-leading independent advice and exceptional customer service.
When it comes to managing your mortgage, LowQuotes can offer you a streamlined and efficient process that ensures a hassle-free experience. With LowQuotes, you can trust that your mortgage needs will be handled with precision and speed.
Our state-of-art digital mortgage portal and our financial advisors work together to provide you with the best possible options tailored to your specific needs. You can upload your documentation and get approved for a mortgage from within your portal, which simplifies and accelerates the entire process.
By using LowQuotes, you can say goodbye to the tedious and time-consuming process of looking for mortgage deals as we do all the research for you.
With LowQuotes, your mortgage process will go more quickly and smoothly, giving you peace of mind and the right mortgage deal for your dream house. Contact us today!
All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
Warning: You may lose your home if you do not keep your repayments.§
Warning: The cost of your monthly repayments may increase.
Warning: You may have to pay charges if you pay off a fixed-rate loan early.
Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, limiting your ability to access credit in the future.
Warning: The entire amount you have borrowed will still be outstanding at the end of the interest-only period. The lender may adjust the payment rates on this housing loan from time to time. (Applies to variable-rate loans only).
