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Who is a First Time Buyer?

A First Time Buyer is a person, (or, where there is more than one buyer, each of such persons*):

  • who has not on any previous occasion, either individually or jointly, purchased or built on his/her own behalf a house (in Ireland or abroad) and

  • where the property purchased is occupied by the purchaser, or a person on his behalf, as his/her only or principal place of residence and

  • where no rent, other than rent under the rent-a-room-scheme, is derived from the property for five years after the date of the current purchase.

Is there provision for any special situations in relation to the scope of the definition of a First Time Buyer?

Yes. There are two particular situations where a person is deemed to be a First Time Buyer.

(a) The trustees of a trust (to which section 189A of the Taxes Consolidation Act, 1997, applies), whose trust funds are raised by public subscriptions for the benefit of permanently incapacitated persons, in respect of the first house(s) bought after the establishment of the trust, for occupation by the beneficiary or if more than one, each of the beneficiaries.

b) A spouse to a marriage the subject of a decree of judicial separation, a deed of separation, a decree of divorce or a decree of nullity in the case of the first acquisition of a house by the spouse following the separation or divorce provided that the spouse had, in relation to the former marital home,

  • left that home;

  • not retained an interest in that home;

  • whose separated/former spouse continues to occupy that home, which home was occupied by both spouses prior to the separation or dissolution of the marriage.

*Each person who is party to the property contract must be a First Time House Buyer to avail of the exemption on stamp duty for example. There is not a provision for splitting on a pro-rata basis.

Mortgage Interest Tax Relief

Mortgage interest tax relief is granted at source i.e. by the lender. TRS (Tax Relief at Source) replaces the system where interest relief was administered through the tax system. The new system means that the borrower's account will be debited with the amount of the full mortgage repayment when due and credited at the same time with the amount of interest relief.

The relief is limited to the standard rate of 20% and monetary limits also apply as per Budget 2008:

Home Loans – Standard Rate 20%
First-Time Buyer*
Single Max


Married Max


Widow(er) Max


*available for up to 7 years

Stamp Duty

The floor space of an exempt property, must not exceed 125 square metres (1,346 square feet). All new properties that meet this requirement, are exempt.

- New Properties larger than 125 sq. metres:
- The duty is payable on the greater of
(a) the site cost or
(b) 25% of the total cost (site cost + building costs)

For example: If such a property is worth €1,000,000 and the site value is €350,000, stamp duty is payable on €350,000 at the rate applicable to that figure, i.e. 3.0% (€10,500) for first-time buyers, or 6% (€21,000) for others.

Stamp duty is assessed on the VAT exclusive consideration, Sections 48 and 56 of the Stamp Duties Consolidation Act 1999 provide that the chargeable consideration for stamp duty purposes is to exclude any VAT chargeable under Section 2 of the VAT Act 1972 on the sale or lease.

Where VAT is included in the consideration, it should be deducted before calculating the charge or rate of stamp duty.

Aggregate Consideration New First Time Buyer Rate
Up to €122,000 Exempt
next €875,000 Exempt
Balance Exempt

New Houses

First time buyers who are owner-occupiers continue to be exempt from stamp duty on new residential property with a floor area of up to 125 square metres. Partial relief based on the new rate structure outlined above, will continue to apply to such buyers where the floor area of the property exceeds 125 square metres.


Some lenders offer various freebies to first time buyers and new customers in addition to discounted rates.

APR Rate

The Annual Percentage Rate (APR) takes account of cost outlays that are payable at the beginning of a mortgage, which are additional to the interest payable. This is why the APR is higher than the related standard rate.

The APR is important as it enables realistic comparisons between the offerings of different lenders. For example, a special low start-up rate may be on offer to new customers for a fixed period. As the rate paid at the outset does not reflect the real cost of the loan, the APR informs the borrower of the annual percentage interest rate that may have to be paid in the future.


Irish house prices year to date

Global Survey: Cost of typical management level house in Dublin, Ireland, could buy 9 similar houses in Houston, Texas, 3 in Amsterdam, 2 in Sydney and almost two in Tokyo

Construction and Housing in Ireland Report July 2006: CSO says Construction Output up 80% in 5 years - Mortgage debt increased from €33bn in 2000 to €100bn in 2005

Irish housing boom may boost public finances to €9bn this year; Government collects average of €100,000 in taxes from the cost of every new housing unit built in State

Irish house prices up 270% since 1996 rising at average of 14.9% for each of the last ten years; Construction sector may shed over 100,000 jobs by 2016

Irish First Time Buyer couples nationally are spending on average 27% of their income on their mortgage repayments

State of Chassis: Artificial restriction on land supply puts Ireland and UK at bottom of property league in Developed World; Irish urbanisation at 4% is among €pe's lowest

July 2005:  New Permanent tsb/ESRI home purchase study on Irish First Time Buyers

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