There are more costs associated with buying your first home than just the 10% deposit. There are many additional fees, duties and taxes that you should be aware of before buying your home.
The first fee you should be aware of is the stamp duty. The stamp duty is not included in your mortgage, so it’s a good idea to save this fee up in addition to your 10% deposit. The stamp duty is calculated at 1% of the selling price on a home or residential property of up to €1m, and 2% of the selling price on homes and residential properties above €1m. This stamp duty may change however, and full details are available on the Revenue.ie website.
Legal fees are another hidden cost of buying a home that you should look out for. There are a lot of legal aspects that have to be accounted for when officially transferring ownership of the property to you, so you should find a trusted real estate lawyer to take care of this transfer. Legal fees will vary depending on which attorney you choose, so make sure to shop around and do your research on how each solicitor’s payments are set up. Some solicitors charge a flat fee while others charge a percentage of the house’s selling cost, usually 1-2%. The Bank of Ireland estimates that this fee will be between €1,500 and €3,000 plus VAT.
Before making an offer on the house, you also should bring in a surveyor to look over the property for you. Because the seller is not obligated to warn you of any defects or problems the house may have, this step is essential to make sure you get a fair price. For help on what to look out for, check out ‘Advice from a builder: 7 things to always look out for while viewing a house’. Bank of Ireland estimates that obtaining a surveyor’s report will set you back about €300 plus VAT.
The next hidden fee is the valuation fee. Before your mortgage provider can sign off on your mortgage, they need to know that the property you plan to buy is being sold at a fair price. Because of this, property valuation must be carried out by a professional valuer recommended by the bank, and this fee will vary, but it is usually between €150 and €250.
Finally, you must pay local property tax, which depends on the value of the property and the local tax rate in the location where the property is. You also will purchase mortgage protection insurance, which covers the remaining debt should you die before the mortgage is paid off, and home insurance, which protects against fire and other damages. Both of these costs will vary based on coverage plan and provider.