Buying abroad/no house in Ireland

galah

Hi all,

maybe one of you can help me...

I am thinking of buying a house in Germany (since I can get them waaaay cheaper there, we're talking 27 k for a two-bedroom flat etc) as a long-term investment, but I want to continue living in Ireland...

Can I actually get a mortgage for that here in Ireland, or would I have to go through a German lender? I checked a few websites, but all the lenders kinda say that for foreign property, you could remortgage your house in Ireland - which I don't have (cause I think house prices here are a joke for what you get...but that's an entirely different discussion) There was no mention of a loan to buy property abroad...

Has anyone done this kind of thing before, and could give me some information, especially also about taxes etc?

All pointers appreciated!
Cheers
galah

antoinolachtnai

You have no collateral in Ireland. The mortgage be secured on the deeds of the German property. So you will almost certainly need a German bank to finance it. There is no reason why you shouldn't be able to do this.

You will pay German tax on the income from the German property, the same as everyone else, I guess. At the end when you sell, I suppose there will be German capital gains tax.

Don't expect German property to appreciate too much. It might, but I wouldn't bank on it ...

Victor

galah wrote:

we're talking 27 k for a two-bedroom flat etc

Is it across the road from a nuclear power plant? It sounds too cheap.

Afuera

You should be careful doing this if you plan on buying a house in Ireland later on. Your first time buyer status will be gone after buying the property in Germany so you'll probably end up having to fork out for stamp duty when/if you want to buy in Ireland.

galah

Thanks for the all the input!

Just to clarify - I'm German, so I would be buying in my home town (and yes, flats there start at around 27 k, might not be the nicest area possible, but hey - here in Galway I'd pay at least 200 k...), and would use the property as a "retirement" home (hence the long-term investment), no really to make lots of money from it, rather to have something to fall back on at a later stage!

Afuera - thanks for the info about the buyer status!

I'll have a think about all this - but as long as the prices are fairly low in Germany, I don't see why I shouldnt buy...

Manny7

Germany is good value, but it probably won't appreciate much. Germans (as you know) are happy to rent for their lives, so prices don't fluctuate much. We're looking into buying a place there at the minute in the town we used to live in (70k for a 2-bed appartment in a student town), whereabouts are you looking at?

galah

Northern Germany...

antoinolachtnai

What are the rent yields like? 9 or 10 percent? Are there many of these available?

Why stop at buying just one? Buy 20 of 'em in a single place for EUR 1.4 million. A group of us could easily do it with the help of a local bank in Germany. We'd only have to put down about 350k. Rent should cover the payments.

a.

garred

Good luck with it Galah, some people unfortunately think foreign property investment is insane. Personally I think if you do homework on an investment and it still seems good well why not.
I don't think you will get a mortgage over here for a foreign property (excluding the UK) unless you have collateral or are topping up a current Irish mortgage. When I bought overseas could'nt get a mortgage of anyone (had to topup current one). Although this may have changed now but I don't think so.

galah

it depends on the reason for investing, I suppose!
But I think long-term it's safer to invest in something in my home town (especially if i want to return at some point...) than here, with the prices as crazy as they are - I would not want to be tied down with a 350 k mortgage over 50 years for a crappily built house in an ugly estate on the outskirts of Galway...
Plus it seems my parents support the idea, and the object could serve as a first rental home for my brother, keeping it in the family...(would not want to rent to the "public" - tenant's law in Germany is very strong, and you might end up with a bunch of nutcases who can't pay the rent - and you can't kick them out as they're protected by the law....It's unreal over there...)

antoinolachtnai

Be careful, renting to relations is not always a bed of roses either. At least renting to strangers, all you can lose is money.

Good luck with it!

Antoin.

The_Conductor

Correct me if I am wrong- but I think there is something new in the German tax code, whereby non-residents but owners of German property have to pay a wealth tax on all their property, both in Germany and abroad. This was quoted to me as the reason that Germans are selling holiday homes abroad in their droves at present- and some resorts in Portugal (Praia del Rei etc) are being deserted.

Before you become a non-resident owner of property in Germany (or a German resident owning property abroad) please check the legal implications.

galah

Thanks for the info!

Will have to look into that! Wealth tax, what's next? (I think the German government is really taking the p*ss at this point, but that's an entirely different discussuion...

ambro25

galah wrote:

Wealth tax, what's next? (I think the German government is really taking the p*ss at this point, but that's an entirely different discussuion...)

That's been done in France for years now. Not many buyers know about it (or are told about it) until a year after their purchase when the tax bill lands