Buying a House just where does all your money go?
We sometimes hear on the radio and TV programmes people commenting on the cost of housing that the legal fees were sometimes in “the thousands of euros”.
The statement is somewhat unfair to the legal business in that not only have they to provide a service to the client buying or selling but they have to act as an Agent for the lending institution and also for the Revenue to collect stamp duty ( a form of tax).
At Michael Monahan Solicitor we give you a three-page written quote from the outset so you can see the detail of where your hard earned money is going.
These days for the purchase of any property under €1 million Stamp Duty is levied at 1% of the purchase price. If you go over 1million Euros in a property purchase stamp duty doubles to 2% of the purchase price.
In modern Ireland especially in the Dublin area many properties are sold for amounts in excess of €1 million which requires Stamp Duty payment on the €2 million property of €20,000.
There are 2 further disguised taxes in that estimate. There is VAT on the Professional Fees of the solicitor charged at a rate of 23% of the Fee. That’s almost ¼ again as to the level of the fee for which cannot be recouped by individuals as distinct from companies who can claim a refund of any VAT payment.
The Land Registry now renamed Tailte Eireann will charge you for the registration into your name but also the mortgage on the property if there is borrowed money involved. The financial institutions under the terms of lending the money leave the borrower pay the cost of registering the charge on the property at the same time when the change of ownership is going through.
Again the charges for registration are proportional to the value of the property which the buyer can budget for anything between €750 and €1000 to have their ownership confirmed. They are also made to pay for a Title Document known as a Folio at an additional cost of €40 which includes a site map again for the purposes of the financial institution who will not accept an Internet print off showing the new owner and charge registered on the property.
At the time of closing the sale searches must be carried on by the solicitor for the purchaser to ensure the Vendor is properly entitled to sell the property and indeed that none of the parties are in any way financially delinquent or bankrupt which would indicate to the lending institution that the borrower may not be able to repay the loan. Again another cost to the purchaser with no contribution from the financial institution who as outlined above rely on the purchasers solicitor to complete the Certificate of Title confirming that the Title is in order and the banks charge is on the folio.
If you add up all the above headings in relation to the Quote given you see the majority of the funds so-called under solicitors’ fees are in fact payments to the State through their various Bodies.
Even more Tax is charged when the actual fee charged is paid to the solicitor for their work. This Fee in turn is subject to Income Tax and USC thus taking even more funds by way of tax on any given transaction.
In an era when people are finding it very hard to get on the property ladder and establish themselves as members of the community the Government seem to take no recognition of the hidden taxes that are payable in any conveyancing transaction and only pay lip service to assist in first-time buyers in the purchase of their homes.
So the next time you have a conversation with someone who’s just purchased a property and claims that the legal fees were in the thousands of euros you have the opportunity to remind them where the money really went!
As always if you have any queries about buying a house in 2026 give us a call