Returning to Ireland – Buying a house in Ireland

Tax is always a major concern for ex-pats thinking of returning to Ireland. Our tax department are sharing some of the common questions that we are frequently asked from people who are looking to return home.

Question: I am planning on buying a home when I return to Ireland. What are the taxes and reliefs available to me?

Where you are returning home to Ireland and looking to purchase a property, there are a number of taxes to be aware of which will increase the overall cost for you. You may also be eligible for the Help to Buy Scheme.

The Help to Buy Scheme

There is a tax relief available for first-time buyers in Ireland where they are purchasing a new build. The Help to Buy scheme provides relief by way of claiming the lesser of the following three options; €30,000, 10% of the purchase value of the qualifying property, or the amount of income tax and Deposit Interest Retention Tax (DIRT) that you have paid for the four years prior to application. If you have been working abroad for the last four years, you will not qualify for this rebate. However, if you have only been away for a short time you may still be eligible, particularly if you defer acquiring your property for the first year after you arrive home.

Stamp duty

Stamp duty is payable by the purchaser of residential property at a current rate of 1% of the purchase price. For properties in excess of €1m, a 2% rate will apply up to €1.5m. Any consideration in excess of €1.5m will be subject to a rate of 6%. You will be required to pay this amount within 44 days of the date of signing the contract for your new home.

Local Property Tax

A second tax to consider is Local Property Tax (LPT). This is an annual charge on all residential properties in Ireland. The amount of LPT due in 2025 will be based on the on valuation of your property as at 1 November 2021, which determines the LPT rate applied by the local authority where the property is located.

Rent relief

When you return to Ireland, you may have to rent accommodation while searching for a house to buy. There is an additional tax credit known as the rent tax credit. This is available to individuals who are renting out accommodation either as their principal residence, or an additional property used to facilitate attendance at work or on an approved course.

Subject to meeting the conditions, the maximum claim for 2025 for jointly assessed couples is €2,000, or €1,000 for a singly assessed individual. If the rent tax credit exceeds your income tax liability, the claim would be equal to your total income tax liability for the year.

If you have any questions about returning to Ireland or any other personal tax issues, please contact a member of our tax team.