First-Time Buyer Schemes & Hidden Costs: What It Actually Takes to Buy a Home in Ireland
- 3 days ago
- 5 min read
TL;DR:
Saving a 10% deposit is only part of the puzzle.
To successfully cross the finish line in the Irish property market, you need to navigate the strict "12% rule" for hidden legal and day-one fees.
Understand the hidden catches behind state grants.
Know the strict legal frameworks around unique properties like granny flats.
The Deposit is only the Start
It’s the most common mistake I see first-time buyers make: assuming that once they hit their exact 10% deposit goal, they are ready to buy a house. Then, they get blindsided by a mountain of additional day-one outlays needed to actually close the deal. The property market requires a clear set of boxes to be ticked. If you plan carefully, you can take advantage of thousands of euros in government incentives without falling into the common long-term traps that catch unadvised buyers. So here we will break down the real cash you need and how the state schemes actually work.
1. The 12% Rule: The Hidden Costs of Buying
Beyond your minimum 10% borrowing deposit, you must budget for a suite of mandatory professional fees and taxes.
To ensure you aren't caught short at closing, aim to have 12% of the purchase price in liquid cash. This will aim to cover your deposit plus these day-one costs, with a small buffer. On a €350,000 purchase, that’s €42,000 rather than the €35,000 deposit alone.
Split your savings into two separate pots from the start: a Deposit Fund and a Fees Fund to avoid accidentally dipping into your core deposit savings.
Cost Item | Estimated Cost | Details & Significance |
Stamp Duty | 1% of property value | Mandatory tax on the first €1,000,000 of the property value (2% on any amount above). |
Solicitor Fees | €2,000 – €3,500 + VAT | Conveyancing fees depend on the firm and legal complexity. |
Valuation Fee | €150 – €250 | Required by most lenders prior to issuing final loan approval. |
Structural Survey | €200 – €450 | Crucial for second-hand properties. Roughly €200 for a drains survey and €450 for a full engineer's report. |
Insurances | Varies | Lenders require buildings insurance and mortgage life assurance before drawdown. |
Ongoing Day-One Costs | Varies | Local Property Tax (LPT), immediate waste management setups, and potential development management fees. |
2. The Four State Schemes (and what you need to know)
Ireland has four major state schemes designed to support first-time buyers. Each one works very differently, and each has catches that aren’t always truly understood up front.
Use them as tools, not lifelines, and understand their implications before committing.
State Scheme | What It Offers | The Core Catch / Rule |
Help to Buy (HTB) | Tax refund up to 10% of property value (capped at €30,000). | New builds or self-builds only under €500,000. Must live in the home as a primary residence for at least 5 years to avoid a clawback. |
First Home Scheme (FHS) | Shared equity arrangement where the State bridges the affordability gap. | It is an equity stake, not free money. If your home value appreciates, buying back the stake costs more. Service charges apply after year 5. |
Vacant / Derelict Property Grant | Financial support for the deep renovation of vacant or derelict homes. | Paid entirely in arrears. It cannot be used as a mortgage deposit; you must fund the purchase and structural works up front. |
Local Authority Home Loan | Government-backed mortgage with reduced, fully fixed interest rates. | Subject to strict income limits (max €80,000 for single applicants, €85,000 combined for joint applicants). Fixed for the full term. |
3. Thinking Outside the Box: The "Granny Flat" and Converted Shed Rules
With space at a premium, properties with granny flats, converted outbuildings or large gardens can be particularly attractive. But it's important to understand exactly what has been built and whether it complies with current planning and building requirements.
Ireland's planning rules changed in July 2026. The planning exemption for certain extensions to an existing home has increased from 40m² to 45m², while the exemption for ordinary garden structures such as sheds, stores and home offices has increased from 25m² to 30m².
There is also a new exemption allowing qualifying detached auxiliary homes of between 32m² and 45m² to be built to the rear of a principal residence without applying for planning permission, provided the development meets the conditions of the exemption. Homeowners must notify their local authority at least 14 days before commencing qualifying works.
If you're considering buying a property with a granny flat, converted shed or separate garden accommodation, don't assume that its existence automatically means it can legally be used or rented as a separate home. Ask your solicitor to establish its planning status, permitted use and any applicable rental or tax obligations before relying on it as part of your mortgage plans.
Viewing Advice for a First Time Buyer in Ireland
When you transition from saving to actively viewing properties, use these smart tactics:
1. Use Daft.ie and cross-reference with the official Property Price Register to see what local homes are actually selling for, not just what they're listed at.
2. Use your phone's compass during a viewing to check the garden's orientation and true aspect.
3. Ask the agent smart questions: “Is the vendor in a chain?” and “How long has this been on the market?” The answers tell you more than the brochure will.
FAQ - Grants & Costs
Can I combine Help to Buy with the First Home Scheme?
Yes, in many cases, both schemes can be used together on the same purchase. However, Help to Buy is a tax refund of your own historical tax money, while the First Home Scheme means giving up an equity stake in your home to the State.
Can I use the Vacant Property Grant as my deposit?
No. The grant is paid entirely in arrears. You must have the capital to purchase the property and fund the renovation works yourself first; the state reimburses you only after verification of completed works. Read more about the details here
Kel Galavan is a Personal Finance and Investing Educator, QFA, author of Mindful Money, and a regular financial expert on Ireland AM (Virgin Media) and Irish radio. With over 20 years of investing experience. Founder of Mrs Smart Money Ltd, and the flagship course Rise Money™: Become a Confident Investor.
Having navigated her own journey from six-figure debt to financial freedom, including a No Spend Year that saved €27,000, Kel combines personal experience with financial expertise to help others make confident money decisions.
Kel focuses on workplace financial well-being, creating workshops and digital programs on personal finance and investing skills for your workforce.
Disclaimer: The information on this blog is for general knowledge and discussion only, and does not constitute financial advice. You should seek independent professional advice before making any investment decisions. Investing carries risk. Links to third-party sites/products are not endorsements.
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