Tax Breaks and Buying Property in Ireland

With more than 300,000 Brits already taking up residence on its shores, the strength of Ireland’s attraction for expatriates and retirees is quite strong.  Despite prices that are considered high by the standards of many investors, buying property in Ireland makes a lot of sense to would be expats for a few very strong reasons.  As the booming property market here cools and housing prices start to fall, there are some changes in the works that might make purchasing here even more attractive.

In this article, we’ll take a look at tax breaks and buying property in Ireland and why Ireland holds such a strong interest for British buyers.  We’ll also explore some tax cuts that should make buying property here even more attractive.

For the last decade or so, Ireland has been one of the top choices of British buyers.  Whilst it pales in comparison Spain as far as the number of expats living here, it beats out France hands down for example.  The common culture, language and even climate have all made Ireland a very appealing home away from home for Brits.  Unfortunately, as construction began to boom, housing prices started to soar.  By October 2006 the average price for a house in Ireland fell in at more than EUR 300,000.  Despite this, Ireland has remained of high interest to retirees and expats, but the prices have been out of reach for many.

This is not necessarily the case any longer.  As all good things must come to an end, so it goes with the Irish property boom.  The market explosion that saw prices rise at a breakneck pace seems to be over.  In fact, MSNBC says that between October 2006 and October 2007 prices fell about 4.7%.  Some sources say the drops are more like 10% in certain areas of the country.

Of course, this is good news for buyers who are considering buying property in Ireland in which to live.  It even fares well for buy-to-let investors.  Still, as prices drop, confidence in the market seems a little shaky.  There are estimates that some 20,000 construction-related jobs might be lost in Ireland within the next year or so.

To shake things up a bit, the Irish government has announced plans to make buying here more attractive.  Whilst there are no guarantees the move will stir the market back into a boom, the news will no doubt be welcomed by investors.

And that news is?  Well, It seems Brian Cowen, Ireland’s finance minister, has announced plans to cut sales taxes on housing purchases from 9% down to 7 %.  The move will apply to buys under GBP 720,000, which accounts for the largest segment of the housing market.  The effort is hoped to spur interest in the Irish property market.

Indeed, between the present falling prices and the 2% drop in taxes, bargain hunters just might find their pot of gold in Ireland.  At the very least, retirees and expats hoping to buy to move will appreciate the cost savings.  Buy-to-flip investors might want to hang on to their hats a while to see if pricing drops level out.