Buying a new home

All you need to know when buying a new home

According to UN figures, Ireland has the highest rate of house building in Europe at 9.5 units per thousand people compared, for example, with 3.5 units per thousand in the UK and an EU average of 5 units per thousand.

Buying a new home

More than 46,500 new dwellings were built in 1999, compared with 30,500 in 1995. Despite this high rate of construction, new properties can barely keep pace with demand and many people are purchasing plots of land and having their own homes built to order. Most new properties in the main cities are apartments, whereas in rural areas the majority are detached bungalows, which are springing up almost everywhere you look.

Prices of new properties vary considerably according to their location and quality, but it’s often cheaper to buy a new home than an old property requiring modernisation, as the price is fixed; the cost of renovation can soar way beyond original estimates (as many people have discovered to their cost). If required, a new property can usually be let immediately and modern homes have good resale potential. On the other hand, new homes may be smaller than older properties and have less land.

A major advantage of buying new is that you don’t have to pay stamp duty, although you’ll incur connection charges for electricity, water and sometimes gas. It’s even possible to obtain a grant from the Department of the Environment towards the cost of a new house. However, a number of conditions must be met, which are principally as follows:

  • The total floor area must be between 38 and 125m2 (except in the case of houses specially adapted for the disabled).
  • Applicants mustn’t have previously built or purchased another house in Ireland for their own occupation.
  • The house must be built in accordance with certain standards and practices.
  • The house must be built by a VAT registered contractor with a tax clearance.
  • The house must be the applicant’s principal residence.

Applications should be made well before any work begins in order to ensure that the plans comply with the appropriate requirements. Plans must be accompanied by various documents including a tax certificate, purchase contract, specifications, planning permission and a fire safety certificate. No payment will be made until all work has been satisfactorily completed and you’re actually occupying the property. You’ll then be given a certificate of provisional approval (by the Department of the Environment) which you should take to your lending institution.

The grant will be paid on completion of your mortgage arrangements. You can give your builder or lending institution power of attorney to receive the grant on your behalf (in which case the DoE should send you a ‘letter of undertaking’ to confirm that they’ll pay the third party). Further details of New House Grants can be obtained from the Department of the Environment ( Housing Grants Section), Government Offices, Ballina, Co. Mayo (Tel. 096-70677).

Note that new properties are also covered by a 10-year warranty called a ‘ Homebond’ and it’s against the law to sell a new house without one. The warranty is transferable to a new owner if a property is sold within the warranty period.

If you’re considering buying a property in a large development, there’s often a ‘ show house’ that will give you a good idea of how the finished building will look (although not everything in the show house will be included in the price!). If you’re buying ‘off plan’ (i.e. before a house has been built), you can usually choose your bathroom suite, kitchen, fireplace, wallpaper and paint, wall and floor tiles, some or all of which may be included in the price.

You may even be able to alter the interior room layout, although this will increase the price. Note that you should make any changes or additions to a property during the design stage, such as including a more luxurious kitchen, a chimney or an additional shower room, which will cost much more to install later.

When a building is purchased off plan, payment is made in stages as building work progresses over a period of one to two years (see below). Note that it’s imperative to ensure that each stage is completed satisfactorily before making payments. If you’re unable to do this yourself, you should engage an independent representative (e.g. an architect) to do it for you.

The quality of new property in Ireland is variable, although all builders must conform to certain standards. The quality of a building and the materials used will be reflected in the price, so when comparing prices ensure that you’re comparing similar quality. Cheaper properties aren’t usually the best built, although there are exceptions. If you want a permanent rather than a holiday home, you’re better off opting for quality.

Most builders include in the basic price a standard bathroom suite and kitchen sink unit, a back boiler and radiators, twin sockets in each room, floor and wall insulation. Some also include fitted wardrobes, an electric shower, ventilation units for bathroom and kitchen, and a fire alarm. Optional extras may include double glazing, oil or gas central heating and exterior paving. Items such as carpets, kitchen units and light fittings need to be installed separately by specialist contractors.

Resale ‘New’ Homes

Buying ‘new’ doesn’t necessarily mean buying a brand new home of which you’re the first occupant. There are many advantages to buying a modern resale home, which may include better value for money, an established development with a range of local services and facilities in place, individual design and style, fixtures and fittings and other extras included in the price, a mature garden, and possibly a larger plot of land. With a resale property, you can see exactly what you’re getting for your money, most ‘teething troubles’ will have been resolved, and the previous owners may have made improvements or added extras such as a loft conversion or conservatory, which may not be fully reflected in the asking price.

Retirement Homes

Purpose-built retirement properties (or sheltered housing) are becoming more common in Ireland, although large purpose-built developments are rare. Some large older properties have been converted into retirement homes, but it’s more usual for individual buyers to have properties specially built, taking into consideration the requirements of older people (e.g. access ramps, stair lifts and emergency systems).

More than 46,500 new dwellings were built in 1999, compared with 30,500 in 1995. Despite this high rate of construction, new properties can barely keep pace with demand and many people are purchasing plots of land and having their own homes built to order. Most new properties in the main cities are apartments, whereas in rural areas the majority are detached bungalows, which are springing up almost everywhere you look.

Prices of new properties vary considerably according to their location and quality, but it’s often cheaper to buy a new home than an old property requiring modernisation, as the price is fixed; the cost of renovation can soar way beyond original estimates (as many people have discovered to their cost). If required, a new property can usually be let immediately and modern homes have good resale potential. On the other hand, new homes may be smaller than older properties and have less land.

A major advantage of buying new is that you don’t have to pay stamp duty, although you’ll incur connection charges for electricity, water and sometimes gas. It’s even possible to obtain a grant from the Department of the Environment towards the cost of a new house. However, a number of conditions must be met, which are principally as follows:

  • The total floor area must be between 38 and 125m2 (except in the case of houses specially adapted for the disabled).
  • Applicants mustn’t have previously built or purchased another house in Ireland for their own occupation.
  • The house must be built in accordance with certain standards and practices.
  • The house must be built by a VAT registered contractor with a tax clearance.
  • The house must be the applicant’s principal residence.

Applications should be made well before any work begins in order to ensure that the plans comply with the appropriate requirements. Plans must be accompanied by various documents including a tax certificate, purchase contract, specifications, planning permission and a fire safety certificate. No payment will be made until all work has been satisfactorily completed and you’re actually occupying the property. You’ll then be given a certificate of provisional approval (by the Department of the Environment) which you should take to your lending institution.

The grant will be paid on completion of your mortgage arrangements. You can give your builder or lending institution power of attorney to receive the grant on your behalf (in which case the DoE should send you a ‘letter of undertaking’ to confirm that they’ll pay the third party). Further details of New House Grants can be obtained from the Department of the Environment ( Housing Grants Section), Government Offices, Ballina, Co. Mayo (Tel. 096-70677).

Note that new properties are also covered by a 10-year warranty called a ‘ Homebond’ and it’s against the law to sell a new house without one. The warranty is transferable to a new owner if a property is sold within the warranty period.

If you’re considering buying a property in a large development, there’s often a ‘ show house’ that will give you a good idea of how the finished building will look (although not everything in the show house will be included in the price!). If you’re buying ‘off plan’ (i.e. before a house has been built), you can usually choose your bathroom suite, kitchen, fireplace, wallpaper and paint, wall and floor tiles, some or all of which may be included in the price.

You may even be able to alter the interior room layout, although this will increase the price. Note that you should make any changes or additions to a property during the design stage, such as including a more luxurious kitchen, a chimney or an additional shower room, which will cost much more to install later.

When a building is purchased off plan, payment is made in stages as building work progresses over a period of one to two years (see below). Note that it’s imperative to ensure that each stage is completed satisfactorily before making payments. If you’re unable to do this yourself, you should engage an independent representative (e.g. an architect) to do it for you.

The quality of new property in Ireland is variable, although all builders must conform to certain standards. The quality of a building and the materials used will be reflected in the price, so when comparing prices ensure that you’re comparing similar quality. Cheaper properties aren’t usually the best built, although there are exceptions. If you want a permanent rather than a holiday home, you’re better off opting for quality.

Most builders include in the basic price a standard bathroom suite and kitchen sink unit, a back boiler and radiators, twin sockets in each room, floor and wall insulation. Some also include fitted wardrobes, an electric shower, ventilation units for bathroom and kitchen, and a fire alarm. Optional extras may include double glazing, oil or gas central heating and exterior paving. Items such as carpets, kitchen units and light fittings need to be installed separately by specialist contractors.

Resale ‘New’ Homes

Buying ‘new’ doesn’t necessarily mean buying a brand new home of which you’re the first occupant. There are many advantages to buying a modern resale home, which may include better value for money, an established development with a range of local services and facilities in place, individual design and style, fixtures and fittings and other extras included in the price, a mature garden, and possibly a larger plot of land. With a resale property, you can see exactly what you’re getting for your money, most ‘teething troubles’ will have been resolved, and the previous owners may have made improvements or added extras such as a loft conversion or conservatory, which may not be fully reflected in the asking price.

Retirement Homes

Purpose-built retirement properties (or sheltered housing) are becoming more common in Ireland, although large purpose-built developments are rare. Some large older properties have been converted into retirement homes, but it’s more usual for individual buyers to have properties specially built, taking into consideration the requirements of older people (e.g. access ramps, stair lifts and emergency systems).

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