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Purchasing a house with land

  • 07-02-2021 1:09pm
    #1
    DLenny
    Registered Users, Registered Users 2 Posts: 1 ✭


    Myself and my partner want to buy a house with land. Himself is into growing fruit and vegetables while I have one horse on livery and another kept elsewhere on grazing. Ideally we would love to buy a house with around 4 to 6 acres, move the horses home and stop paying livery rates. I want to build a sand arena down the line. We're looking in Galway and haven't found anywhere that fits the bill.

    Recently we looked at two cottages, one with 20 acres and the other 30, with the latter really winning out (views, dry land etc). Unfortunately, when we went back to our broker to speak about the mortgage we'd need, she told us that the banks would never consider giving us a mortgage to buy this place. Apparently they will only give us a mortgage for the residence and maybe up to 2 or 3 acres with the remainder needing to be financed through other means. The seller would also have yo be willing to split the folio. Perhaps rather naively we had assumed that since it was a home on 30 acres, we could just get a mortgage for it all. We both have well paying jobs, good deposits saved and can easily afford repayments.

    Anyone have any experience in financing small holdings? Is our dream dead? If we have to wait until a house comes up with 4 to 6 acres in Galway we'll both be near to retirement!


Comments

  • #2
    enrique66_35
    Registered Users, Registered Users 2 Posts: 277 ✭✭enrique66_35


    The reason the banks wont mortgage (or at least what they told me) was that anything over 2 acres they would be concerned their security could be diluted by selling off bits of land down the line for someone else to build on. This was Bank of Ireland but I imagine the other banks are the same. The way they suggested to me was to buy the house with the 2 acres around it and split the rest to a separate folio and buy for cash.

    For instance if the house with 30 acres is available for 300K (for example), you'd be looking to agree a price of 250K for the house and 2 acres which the mortgage covers but then buying the remaining 28 acres for 50K. If the cash isn't available for that then could look at different finance options like farm loans etc - totally separate area to mortgages for homes.

    The other thing to consider is stamp duty - 1% on houses (up to 1 acre) and 7.5% on agricultural land so you'll need valuations for the house with 1 acre, and the remaining 29 acres - in essence splitting the purchase price between the two.

    Its possible but not straightforward and will probably cost a small fortune in legal fees and valuations etc.. good luck!


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