First-time buyers: What you need to know

I’m a first-time buyer; what do I need to know about buying a house? 

Buying a home is an exciting time for many. Indeed, for first-time buyers, the excitement is perhaps only matched by the confusion of grappling with estate agents, banks, solicitors, and the various stages of the purchasing process.

Firstly, it’s important to understand that you are only deemed to be a first-time buyer if you have never taken out a mortgage loan in Ireland or abroad, do not own a private residence in Ireland or abroad, and plan to occupy your target property as your primary residence.

And don’t forget – if you are applying for a joint mortgage with a partner who previously owned a home, you are not a first-time buyer.

There is a lot of state support out there for first-time buyers to help them get on the property ladder.

One of the great benefits of being a first-time buyer is that you only need a minimum deposit of 10% of the purchase price of the property – a significant saving on the minimum 20% required for non-first-time buyers.

You may also be able to access the Help-to-Buy Scheme if you are purchasing a new-build home. This entitles first-time buyers to claim up to €30,000 in tax relief following the purchase of properties costing €500,000 or less.  The amount that you can claim is the lesser of:

  • €30,000
  • 10% of the purchase value of a new home or of the approved valuation of the property, in the case of self-builds

Or

Competition is fierce in the Irish housing market right now. With too few homes to serve the growing number of prospective buyers, you may feel like you need to move quickly to lodge an offer for your desired home. This only underlines the importance at this stage of ensuring that you have your mortgage approval in place, and you have engaged a solicitor to handle the legalities of the purchase.

If your offer is accepted, buyers must arrange for a survey to be conducted on the property. This is necessary as it is not incumbent on the seller to tell prospective buyers about any structural or underlying issues with the home. Be aware, the granting of the mortgage is dependent on an independent valuation being carried out and the bank receiving the final report.

Your mortgage is also dependent on your ability to obtain home insurance on the property. This is not always straightforward as some insurance companies may perceive the flood risk to a property differently. It would perhaps be helpful to seek a quote from an insurer early in the sale process. Buyers also must take out life assurance to cover the cost of the mortgage if they were to die before the loan is repaid.  If you have any underlying health conditions, you should investigate obtaining life cover, sooner rather than later.

Stamp duty is due on all properties. Duty is charged at 1% of the purchase price of the property up to a value of €1m. For properties costing more than €1m, stamp duty is charged at 2%. For a new home, the VAT element of the purchase price is not subject to VAT.

All documents related to home insurance and life assurance must be filed with your bank or lending institution before the funds will be released to your solicitor. Your solicitor will also calculate the amount of stamp duty, land registry fees, local property tax, search fees required to complete the sale.

If you are a first-time buyer and want help negotiating the legalities of buying your first home, get in touch Marguerite or Emma on 044 9347655 or email info@buckleyandco.ie and we will be happy to help.

Please remember that this blog is written for information purposes in May 2024.  This area of law may be subject to change and specific legal advice should be sought in every case.