Legal fees for buying a home to rocket by up to 87pc
Published 17/11/2012 | 05:00
HOUSEHOLDERS buying a home will be hit with up to €325 extra in legal charges from next month.
That's because the cost of registering their property is set to soar by up to 87pc from December 1 due to new higher land-registry fees.
Consumer and legal watchdogs slated the move which hard-pressed homebuyers needed "like a hole in the head".
The price of registering the average €167,000 property is to be hiked by 60pc from €375 to €600. And for the average Dublin home now fetching €240,000, the cost will rise overnight from €375 to €700. That's an increase of €325, or 87pc more than the current rate.
The higher charges will affect many buyers rushing to complete purchases before the Government ends mortgage interest relief incentives at the end of the year.
Justice Minister Alan Shatter approved the new higher land registration fees, which are on a four-tiered scale based on the value of the property.
The Property Registration Authority which manages the land registration system said that they were obliged by law to charge fees at an appropriate level to cover the costs of providing these services.
"It should be noted there has been no increase to Land Registry fees since 1999," it said in a statement.
But the Consumers Association of Ireland said there was no justification for such increases at this time.
"People struggling to buy homes need this like a hole in the head. With the property tax ahead and everything else, the last thing they need is a huge hike in other charges," said CAI chairman Michael Kilcoyne.
"It's just another cost for people and I can't see any justification for it given the administration of these things should be becoming cheaper when so much is done electronically," he said.
The Law Society said solicitors were very concerned about the hikes which were effectively a hidden tax on buyers.
"We very much regret that another layer of cost on purchasers is being imposed by the State on an already distressed property market," said its director general Ken Murphy.
For transfers of small parcels of land worth under €50,000, registration fees will double or even treble overnight.
Fees will go up from a range of between €125 and €250 to a standard €400 charge no matter how low the value of the land is.
But for those buying larger homes valued at over €400,000 the cost will go up from €625 to €800 – a 28pc increase which is markedly less steep than the hike for those buying smaller homes.
The new scheme also includes substantial hikes for other services such as voluntary property transfers or transfers on death.
Solicitors said they are shocked at the scale of the increases and the fact there was only two months notice given.
This meant many current buyers are facing higher charges to complete the purchase of their home than they would have expected when initiating the process over the summer, one solicitor said.
Property economist Ronan Lyons said the hikes would hurt some buyers on a tight budget.
"It will obviously catch some people who are waiting to complete sales now," he said.