The way we buy and sell houses is about to change 22 November 2018
All property title queries will be dealt with and resolved in advance of contract signingFrom January 1st, 2019, the buying and selling of houses and other real estate will move to a pre-contract investigation of title (PCIT) system. This will mean that all sellers, through their solicitor, will need to produce title packs pre-contract. Buyers’ solicitors will need to investigate title pre-contract. The benefit of this change is that all property title queries will be dealt with and resolved in advance of contract signing. Buyers will still need to take extra care not to sign a contract, by private treaty sale or by auction (whether online or not), before getting independent legal advice.This new system will be more efficient and cost-effective as we should see a reduction in the duplication of work and effort. Subject to availability of finance, the time frame between contract signing and completion of a property sale may also shorten. We should also see borrowers engaging earlier with their lenders to ensure they are satisfied with the title being offered as security for the borrowings before the contract is signed.
Statute of FraudsOver the millenniums there have been countless dealings in land in various forms. In 1667 the Statute of Frauds required that a contract regarding land be evidenced in writing. Deeds, as the instruments documenting and effecting land transfers, became the basis of the proof of one’s ownership. A system of registration of deeds was established in the 18th century and in the 1960s a registry of land ownership was set up in Ireland.The vast majority of land transfers (or conveyances) have been effected on foot of investigation by buyer’s solicitors of seller’s deeds. Until recently a deed to the seller that was 20 years old or more constituted the point from which a buyer should start the review. By change of law, in 2010 this period was reduced to 15 years. This has the effect of reducing the number of documents to be produced by the seller to prove title and the extent of a buyer’s title due diligence. In 2011 it became compulsory to register ownership of all “unregistered land” in the Land Registry; however it will be many years before the register is complete.In 1976 the Law Society of Ireland published the first edition of its “standard” land contract for sale. The standard contract has evolved over time and it has been used in the vast majority of conveyancing transactions since. While certain title warranties are provided for, ultimately the principle of caveat emptor (let the buyer beware) underpins it. What that means for the buyer is that he or she has to investigate the title during the conveyancing process. If, ultimately, there is something wrong with the title, the buyer has limited recourse to the seller.
Two-stepped processLike in many countries, our conveyancing system is a two-stepped process. The first period leads to the signing of the contract. The second period that follows leads to final completion. “Completion” is the point at which the title formally transfers across. The main reasons for the two steps are to give the seller the time to produce the copy title documents and to give the buyer the opportunity to review them. The origin of the former is largely related to the bygone difficulty of document production and transmission.It is easy to forget how much used to be involved in copying and transmitting information in hard copy before the current digital age. Immediately before the photocopier, handwritten deeds were copy typed, whereas now scanned copies are emailed or posted to online “data sites”. So, the practice was (or rather, is) that the seller would only evidence the title after the contract was signed. This process could only work if the standard contract permitted, as it currently does, the buyer to get out of the contract if the title, on investigation post-contract, is defective. Among the many difficulties with this approach, is that disputes about what is good or defective title are not uncommon and running a dispute when parties are “in contract” can be costly. Obviously, document production and data sharing has moved on considerably, so it was perhaps inevitable that a different approach would begin to take a hold in practice, as it has.
Change of systemTaking notice of these changes, in 2016 the Law Society surveyed the solicitors’ profession on the potential for a move to a PCIT system. A clear majority of those who responded expressed favour for the change. Many practitioners said they were unhappy to leave title due diligence to the post-contract period, and pointed to the inefficiency in the current system of addressing pre-contract inquiries, only for many of the same queries to be raised again in the post-contract title investigation.The PCIT approach has long been a feature of the new homes market and in higher-value transactions. In recent years receiver sales have been similarly structured; so the solicitors’ profession is familiar with this approach. The buyer market has engaged well with it where used; buyers have shown a clear willingness to undertake title investigation in advance, without the security of a contract for sale. More generally, it seems that sellers are more willing to and they have better practical ability to produce title documentation pre-contract.Having regard to these factors the Law Society’s conveyancing committee decided to adopt the change fully. The forthcoming 2019 contract for sale addresses this by entirely changing the conveyancing system to a PCIT system.
Title issuesThe new system will also advance any disagreements on title issues. If the buyer and seller are not going to see eye to eye on title issues, it is better that this conclusion is reached before they have become bound by a contract. This approach should lead to overall cost and time savings on post-contract wrangling and potential litigation. It is far better to end the coupling during the engagement rather than after the marriage contract, if you pardon the analogy.Michael Walsh is partner and head of property at ByrneWallace, Dublin, and he is a member of the Law Society’s conveyancing committee and convener of its pre-contract title investigation taskforce.
Fewer houses being bought as property prices continue to rise 15 November 2018FEWER houses are being bought as property prices continue to rise.Prices were rose by 8.2pc nationally in the year to September, but the rises in Dublin have continued to ease off.Economists said the surge in prices in the past few years and Central Bank lending limits are taking the steam out of the market.The latest figures from the Central Statistics Office (CSO) also show a drop in the number of property transactions.The CSO said 3,821 property transactions went through in September, down almost 300 from two months previously.Dublin recorded the lowest level of price growth for almost two years.Prices rose by 6pc in the capital, the CSO said.The strongest price rises were in the mid-west region, with prices increasing by 21pc in the last year.The Border region showed the least price growth, with prices increasing by 5.8pc.When it comes to Dublin the largest increases were in Dún Laoghaire-Rathdown with price growth at 8.3pc.In contrast, south Dublin recorded the lowest with prices rising by just 4.2pc.The median, or middle, price for a property nationwide at the moment is €255,000, up €5,000 in the last month.Irish Independent
Unwanted new records as rents surge 30pc higher than during Celtic Tiger 15 November 2018Rents have risen 30pc above Celtic Tiger rates and reached a record high for the 10th consecutive quarter, according to a new report.The findings by Daft.ie don't expect the rental hikes to stop any time soon.Nationally, there has been a rise of 11.3pc on last year, with the average monthly rental cost coming in at €1,334.Rents in Dublin are 10.9pc higher than last year.In Dublin the average rental price for a one-bedroom apartment ranges from €1,215 in north county Dublin to a high of €1,981 in Dublin 4.Limerick and Waterford city have each seen a jump of more than 16pc in rental costs for a the likes of one-bedroom apartment. Meanwhile, the rental cost for five-bed homes in these cities are 26pc higher than 2017.Rents in the capital are now 36pc higher than they were at their previous peak.Daft.ie economist, Ronan Lyons said: "A problem that started to emerge nine years ago in Dublin has not only not been resolved, it has spread to the rest of the country".Once again - for the 25th consecutive quarter - rents have risen. Once again - for the 10th consecutive quarter - both a new record high for rents has been set and the year-on-year rate of inflation is above 10pc," he said.Mr Lyons said the reason rents were rising countrywide is "because demand far outstrips supply". He said the country needed to build far more homes than it was currently and that these should be predominantly urban apartments, based on the research.The report found that the average market rent has risen by some 80pc in the past seven years, since it bottomed out in in 2011.Irish Independent
Couples earning up to €90,000 may avail of new affordable housing scheme after Budget 20 September 2018House-hunting couples who earn up to €90,000 a year may be able to avail of a new affordable housing scheme after the Budget.Fianna Fáil is demanding the introduction of an affordable housing scheme which will see homeowners enter into a shared-ownership arrangement with local authorities.The scheme, which is central to Budget negotiations, will see local authorities buy houses from developers before offering them at significantly subsidised rates to first-time buyers. Local authorities will retain a stake in the properties until the home is sold or bought out by the property owner.The scheme will be targeted at people earning between €30,000 and €90,000.It is envisaged that Dublin local authorities would subsidise houses by as much as 50pc under the scheme which aims to provide houses priced between €160,000 and €200,000. Fianna Fáil is insisting on the scheme being introduced next year to ensure there is no delay in the roll-out of affordable housing.The party is also proposing a more comprehensive long-term affordable housing scheme that would involve local authorities building new homes. This would see €200m earmarked to build 4,000 affordable houses.The two schemes form the backbone of Fianna Fáil's demands ahead of the final budget of the confidence and supply arrangement.Fianna Fáil housing spokesman Darragh O'Brien, along with the party's budget negotiator Barry Cowen, yesterday met Finance Minister Paschal Donohoe and Housing Minister Eoghan Murphy to discuss the proposal.A Fianna Fáil source said it was "making slow progress" on affordable housing but insisted the two new schemes are at the centre of its budget demands.Fine Gael and Fianna Fáil will meet over the coming weeks to determine how much funding is available for social housing.Irish Independent
Properties in Tramore under €170,000 07 September 2018We have a selection of really good homes under €170,000 now available in Tramore.
Check out this quick video.
Revealed: Increased house supply fails to halt price spiral as ordinary families squeezed out 19 June 2018BUILDING more houses has failed to drive down prices in areas of high demand, startling new figures reveal.The average price paid for a new home has risen by almost 60pc in some parts of the country, despite hundreds of units being built in these areas last year.The new revelations run contrary to the Government insisting that increasing output would stabilise prices and give working families the opportunity to buy their own homes.A detailed analysis of Central Statistics Office (CSO) data by the Irish Independent reveals a host of trends.They show: The average price of a new home in January 2018 was €324,999, up 10.2pc compared with the same month of 2017; Investors paid an average of almost €217,000, compared with €314,999 by a first-time buyer a difference of more than €98,000; Despite supply increasing, prices rose in 54 out of 80 Eircode areas where information was available; In areas where 200 units or more were built in 2017, prices rose in 13 and fell in five.The sharpest increase was in Cork Southside, where prices were up 57pc. The steepest fall was in Swords, where prices fell by 20pc.These figures are based on the average price paid for a new dwelling in January 2017 compared with January this year.They are a snapshot in time and include both purchases of houses and apartments, although they do not go into further detail about how many properties were sold during those months.The figures suggest that prices show no signs yet of stabilising.Architect and UCD lecturer Orla Hegarty, who has repeatedly queried official data on house completions, said a rise in housing output would not drop prices."The price of new houses drifts up and down with general property prices. If a house in Dundrum sells for €500,000, and you build a new one, you'll sell it for €500,000."The more they build, the more people buy. It's a way of storing wealth."Builders are chasing the premium product, like student housing or infill developments in south Dublin."They don't need to get into the mass-market stuff."If there were more players,Architect Orla Hegarty warns house prices will not drop they would do other things." The data also shows that pension funds and cash-investors are paying an average of 100,000 less for a new home than first-time buyers.This trend may be limiting the ability of ordinary families to compete in areas of high demand including parts of Dublin, Galway and Cork.The reasons why investors enjoy lower prices is due to the precarious financial position of some builders, sources suggest.Finance is expensive, and investors often buy multiple units at a time, which provides financial certainty.It also meant the builder did not have to incur the cost of developing a show house, or fund marketing and legal fees on the sale of properties.The latest revelations come after new data from the CSO this week lifted the lid on exactly what is happening in the housing market.The official statistics body revealed that the number of homes built between 2011 and 2017 had been over-stated by more than 60pc.Government figures, based on the number of units connected to the ESB network, had suggested that 85,154 new homes were completed.But the CSO said this included farm buildings, mobile homes, vacant properties and units in ghost estates. The correct figure was 53,578.Last year, a total of 14,446 units were completed. This compares with official figures of 19,271.This total also includes one-off single units, most of which will never be offered for sale.Irish Independent 17 June 2018
Tax Obligations for Non Residents! 08 March 2018
New council mortgage scheme to offer lower rates than most banks 23 January 2018
FIRST-time buyers will be able to get a loan worth up to €288,000 with an interest rate of 2.25pc for 30 years under the Government’s latest plan to tackle affordability in the housing market.The new Affordable Mortgage Scheme offers lower rates than most banks – and significantly, the interest will be fixed for the duration of the loan.Housing Minister Eoghan Murphy will today announce details of the scheme along with new proposals for building more mid-price homes and ensuring long-term affordable rents.The Rebuilding Ireland Home Loan, which is likely to save homebuyers up to €10,000 over the lifetime of a mortgage, will be run by local authorities from February 1. It will be subject to the same lending rules as ordinary banks, which currently offer first-time buyers interest rates in excess of 3pc.The Government loan can be used both for new and second-hand properties, or to build your own home.But to qualify, an individual’s annual gross income cannot exceed €50,000, or in the case of a joint application €75,000.There will also be a limit on the price of a home that can be bought from the scheme. In the Greater Dublin Area, Cork and Galway, the maximum market value is €320,000. In the rest of the country, it is €250,000.House hunters looking to avail of the deal must also have had two insufficient offers or refusals for a mortgage from two lending institutions.Mr Murphy said the scheme would offer buyers “absolute certainty of their repayments over the lifetime of the loan”.“What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one-third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security,” he said.The minister will also use a housing summit in Dublin today to announce an affordable purchase scheme that will see affordable homes built initially on State land.The State will retain an equity in all discounted homes sold. For example, a house that costs €250,000 may be made available to purchase at €200,000.The equity share can be paid off, interest free, by the purchaser at a later date. Or if the owner wants to sell early, the State can take that portion back at the time of sale.Details of the full qualifying criteria have yet to be finalised ahead of a launch next month, but it’s understood the same income limits as under the Rebuilding Ireland Home Loan will apply.Mr Murphy said that there were four “major ready-to-go sites in Dublin being advanced through procurement with construction likely to start before year-end”.The third element of the minister’s announcement today will be an affordable rental scheme.This will be done using a model that sees rent charged based on the cost of building the property, together with ongoing management and maintenance charges, but with a minimal profit margin included.A pilot project on this initiative is under way in Dún Laoghaire-Rathdown County Council, in conjunction with the Housing Agency and an approved housing body, using publicly owned land.The minister is in discussions with the European Investment Bank about cost rental and other affordable models that could work in Ireland.
- Affordable Mortgage Scheme will begin on February 1
- The loan can be used both for new and second-hand properties, or to build your own home
- Income limits and maximum house price limits part of scheme
Tax Tips Prior To Year End 18 December 2017
'Trapped generation' hit by new changes to mortgage lending rules 29 November 2017
Central Bank tweaks mortgage limits for those trading upSecond-time buyers have been hit by new changes to mortgage lending restrictions. Central Bank Governor Philip Lane left the rules much as they are, but he did make a slight adjustment to how the exemptions to the lending limits work.This will largely hit the 'trapped generation' who are trying to trade up.Most buyers will still be restricted to borrowing no more than three-and-a-half times their income.First-time buyers will still be required to have a deposit of 10pc of the property's value, with a 20pc deposit needed by second-time, and subsequent, buyers.But there are exemptions to the rules. Up to now, banks were able to allow 20pc of all borrowers an exemption from the income limits. This exemption did not distinguish between new and second-time buyers.The exemptions allow the likes of a newly qualified doctor to avoid the income limit, as their income is expected to rise.Now the regulator has said banks would be allowed to exempt only 10pc of second-time buyers from the income-limit rules.However, banks will be able to exempt up to 20pc of first-time buyers from the rules, if they qualify for an exemption.Lobby group Brokers Ireland said the changes made did not go far enough.It said the existing rules remained too restrictive, especially for second-time and subsequent buyers, with good repayment capacity. It also claimed the limits are driving up rents.But Prof Lane said this reflected the reality of lending at the moment, where new buyers often had the potential to earn more as their careers progress.This meant they got an exemption more often than a second-time buyer."The larger allowance for above-ceiling lending to first-time buyers compared to second and subsequent buyers reflects the different characteristics of these two groups," said Prof Lane. "In particular, first-time buyers are typically younger, with current income levels lower, relative to expected future income levels."It is not expected that the change to the exemption limits will lead to higher, or lower, overall bank lending.But director of financial services at Brokers Ireland Rachel McGovern said there was no rationale for differentiating between first-time and subsequent buyers.She said the 10pc deposit rule should apply to all buyers, not just first-time buyers."And the 3.5 times gross income is too restrictive and should be eased to 4.5 times income for all buyers," she said."Many who bought at close to or at the top of the market have been unable to move. As their negative equity diminishes and their housing needs change, the rules compel them to find 20pc deposit before they can move. That is a mountain too high to climb for many."Brokers Ireland, which represents 1,300 broker firms, said the rules were good in principle, but were introduced far too early in the cycle, and had the effect of locking many out of the market."They have the effect of driving up rental prices, as we had predicted when they were introduced, to the extent that it has become cheaper to buy than rent in many parts of the country. The winners are cash buyers and investors, unfortunately," said Ms McGovern.Irish Independent