Irish law allows, when changing the owner of an apartment building, to evict all tenants – for repair work. It is less profitable for local residents to buy profitable real estate: they bear the burden of high income tax.
As a result, foreign investors, ceteris paribus, receive higher returns.
Pay attention to the low tax when transferring ownership of objects (stamp duty). For real estate worth up to €1 million, it is 1%. For comparison, in Berlin, a similar payment is 6% of the price of the object.
The tax is calculated annually based on the current market value of the apartment in the real estate register. The amount of tax is determined depending on whether it falls into a specific price group.
Owners are required by law to register lease agreements with the Housing Lease Commission. The registration fee of €90 must be paid within one month from the date of conclusion of the contract.
Insurance costs vary by property. For the type of property in question, we have estimated the insurance premium at €300 per year. The tenant usually buys separate insurance for his property, and the owner’s insurance will also cover accidental damage to the apartment. The risks of damage to the structural elements of the building are usually covered by special insurance, which is included in the operating costs.
The funds are transferred to the management company, which annually prepares and agrees on the budget for operating costs. Our forecast includes €2,000, but the amount may vary from €2,000 to €4,000, depending on the level of the complex. These costs usually include:
- repair and maintenance of common areas, parking lots, sidewalks, access roads; cleaning common areas, including washing windows, cleaning carpets, preventing drainage;
- repair and maintenance of elevators;
- lighting of common areas;
- gardener services;
- security – house doors and locking devices, intercom, entrance and entrance to the territory;
- maintenance of warning and fire extinguishing systems, control of the sanitary and epidemiological situation;
- garbage collection and disposal;
- other services (for example, building insurance, civil liability insurance, services of auditors and lawyers for HOAs).
Property and tenant management costs about 10% of the rent. These services are provided by a third party contractor.
Spire Capital also provides investment management services (the cost is €1,800 net of VAT per year), which includes the following:
- relationship with a company that provides facility management services;
- consideration of service requests;
- monthly planning and control of receipts and payments; comparing rentals with the market and maximizing revenues;
- accounting, calculation and payment of taxes;
- compliance with all requirements of regulatory bodies, including the Commission for the lease of housing stock;
- preparation of semi-annual reports for the investor and payment of profit to him;
- interaction with realtors, engineering and construction companies, registration and tax authorities, accounting companies and tax consultants.
For Pre 63 apartment buildings, the cost of management services may vary depending on the property.
Annual tax reporting
When you receive income from renting an apartment in Ireland, you are required to file a tax return. Accounting and declaration preparation costs €1,500 excluding VAT.