Buying Land - Hidden Fees

abnormalnorman

Hi,

Just asking - im thinking of buying maybe 15 acres as hobby farm. iv no other land.

What hidden costs would I be facing?

Say I bid on the land at auction , and win it for €100k on the day - do I need to pay VAT on that? Or solicitors fees?

epfff

Stamp duty and solicitors are the ones I can think of

Jim Simmental

Stamp duty is the big one @ 7.5%

so stamp duty alone in your 100k farm is €7,500

dmakc

Life insurance if long term

kollegeknight

Stamp duty- 7.5%

solicitors fees- whatever you’ve agreed. And May include some of the below.

land registry deed of transfer- €130

land registry new folio (if required) €75

maybe right of way registry- €40

maybe folio maps- €40

Micey.ie

Yeah stamp duty and solicitors fees-which are usually around 2k around here even if a 1/2 acre site or 200 acre farm,and that could be 2k for both parties as different solicitor’s have to represent buyers and seller

PoorFarmer

https://www.boards.ie/discussion/comment/118655002#Comment_118655002

As far as I know if you are getting a commercial loan to buy the land you will end up paying for the banks solicitor also.

Donald Trump

1% to me for giving you this advice 😉

Donald Trump

https://www.boards.ie/discussion/comment/118648145#Comment_118648145

Public liability insurance thereafter too.

Lime Tree Farm

https://www.boards.ie/discussion/comment/118655814#Comment_118655814

As far as I know, If it is just land on its own without any buildings on it, you won't get public liability.

Theheff

If you are under 35 and completed the green cert you are excempt from paying stamp duty. Unless this changed in recent years.

Theheff

Donald Trump

https://www.boards.ie/discussion/comment/118657279#Comment_118657279

You don't have to have completed it at the time either. I think you get 4 years to do so before it is clawed back

Kevhog1988

Heres a hidden cost i had... a new gate because the old one was taken by the man who had the place leased...

amacca

https://www.boards.ie/discussion/comment/118665980#Comment_118665980

😁 electric fencer and over two months of free grazing for the man's cattle in a recent transaction with me

Neck like a jockeys ballsack

Lime Tree Farm

https://www.boards.ie/discussion/comment/118665980#Comment_118665980

We have placed gates, water troughs and a round feeder on rented land.. They are not part of the land owners fixtures and fittings.

Kevhog1988

https://www.boards.ie/discussion/comment/118666202#Comment_118666202

The gate was there before him...

Lime Tree Farm

https://www.boards.ie/discussion/comment/118666916#Comment_118666916

Different in our case, broken rusty gates and strands of barbed wire.

cute geoge

https://www.boards.ie/discussion/comment/118666916#Comment_118666916

Well if you can afford to buy land ,you surely should be complaining about buying a gate and to say the gate was there before him ,how can you say it belonged to the land .

Gman1987

Out of interest what sort of interest rates are ye being charged on land loans? Looking at a potential purchase currently, have just approached one lender at the moment and they are looking for base plus 3.75%. Haven't approached any other lender currently but thought their should be better value available than that? €425k loan on a €625k purchase. Is their any other lender apart from BOI and AIB that do land loans?

Kevhog1988

https://www.boards.ie/discussion/comment/118666981#Comment_118666981

What sort of a statement is that?. I can say it belonged to the Land because it did... Thats just a fact

Mooooo

https://www.boards.ie/discussion/comment/118667051#Comment_118667051

Variable? Given what they are lending out on houses below 3 % you'd think they'd be able to do better. Their margins are saucy here to say the least, esp when you are below 70% ltv

Gman1987

https://www.boards.ie/discussion/comment/118668373#Comment_118668373

Variable I guess, its quoted as a fixed rate of 3.75% over base over 20 years. Base borrowing rates for the bank is currently 0% but if that moved to like 2% they your 3.75% rate would increase by 2%. I agree it looks expensive to me so I'm interested to hear what others are being quoted or have agreed in recent years.

Mooooo

Their margin is 3.75. Was 3.5 here with boi taken out 6 years ago. Could have gotten slightly better had I switched but the other bank wouldn't taken on the existing debt which I was refinancing so stuck with BOI then.

Over 20+ years at that margin I was told to budget for it averaging near 7% for the duration but have fortunate with low interest in the last number of years. Price em both and see what you can do. Interest rates rising also means it doesn't cost them to hold money so perhaps they might move on their margin with loans then

morphy87

I was looking at purchasing a parcel of land, just wondering what way is the interest calculated on these loans? I was trying to purchase some a few years ago but I was only borrowing some of the money over 12 years and my interest rate 6.5 percent unsecured, just reading here some posters were getting a rate of 3.5 to 3.7 percent, , how are you been offered these rates? Is this rate an option when going 20 years?

Pussyhands

https://www.boards.ie/discussion/comment/118657910#Comment_118657910

This is great. I'm looking at some land now and am thinking of buying it. I heard something about young farmers being classed as under 40s now. Is this true?

And does green cert mean no stamp duty at all for young farmers? I thought it was 1% but maybe that's for older farmers with green cert too.

Donald Trump

https://www.boards.ie/discussion/comment/119096500#Comment_119096500

I don't think so on the 40. There is an age limit of 40 for some schemes (Organic I think) but I don't think that's applicable for stamp duty. 35 and under for Stamp duty and be classed as "trained" (or attain that within X years) and you get 0%. If you go Green Cert route it isn't free either to do it and it will take a bit of time/effort. I think it's abotu 3k through Teagasc and maybe 2k for the private colleges.

1% is for consanguinity relief. That is being for transferred land from a close relative. Age irrelevant for that.

Where are you buying and why are you buying?

Donald Trump

https://www.revenue.ie/en/property/stamp-duty/exemptions-and-reliefs/reliefs-for-farmers.aspx

Young Trained Farmer Relief

To claim this relief, you must:

• be under 35 years of age
• hold a relevant agricultural qualification
• have submitted a business plan to Teagasc
• and
• be the head of the farm holding.

You must also intend to:

• spend at least 50% of your normal working time farming the transferred land
• and
• retain ownership of that land

for a period of at least five years from the date of transfer.

Perhaps I was mixing up the being able to finish the qualification after 35 with inheritance reliefs. I'm nearly sure though that you can claim 0% under 35 and finish your qualification later.

Easten

My own opinion on this young farmer scheme malarkey is it is ageism and discrimination. Theirs an awful lot of lads who are not in a financial position to buy land until well into their 40s or build new sheds etc I wonder has anyone challenged these schemes on a legal basis.

Donald Trump

https://www.boards.ie/discussion/comment/119096585#Comment_119096585

The same argument could be made as regards farmer v non-farmer.

wrangler

https://www.boards.ie/discussion/comment/119096585#Comment_119096585

Young farmer schemes are there to encourage farmers to transfer their farms early. If the age limit wasn't there the reliefs wouldn't be any advantage as the owners would be transfering their farms to 40 - 60 year old heirs any way.

Challenge it and the reliefs could be scrapped because there'd be no benefit