General Terms used in property transactions:

Buying to let
If you are planning to buy a property to rent out you are entitled to deduct certain expenses from your rental income each year - including repairs and maintenance, management and rent collection fees, rates, insurance, losses from other Irish rental properties, and mortgage interest payments - to arrive at the amount on which you pay income tax.
Remember that if you are not registered with the PRTB (Private Registry of Tenancies Board) you'll have no entitlement to any tax deductions on rental income for that tax year. It costs €70 per tenancy registered.

Buying off-plan
Make sure you understand the plans fully and get professional advice if you can before paying a deposit. A surveyor will look at daylight, size, privacy and future building plans.
Make sure you get an insurance policy to protect against the builder going bankrupt before construction is completed.
Don’t bank on moving in on the completion date you are provided with and factor a couple of months into your grand plan - as delays are commonplace. So no need to ring the landlord just yet!

Energy efficiency
Most people when buying a new car consider its efficiency - the number of miles per gallon the car can do - while with housing up to now Irish customers haven't had a choice. However, this is set to change in January 2007 when home energy rating certificates will be introduced, which will assure buyers of new homes that the buildings are energy efficient. In the future and especially in a softer housing market houses that don't have high energy ratings will be harder to sell so energy efficiency is a very important thing to consider when buying a house. Fuel efficient homes are also more environmentally friendly.

Fixed interest rate
This is a rate of interest that is set for an agreed period, e.g. for 3 or 5 years. At the end of this period, the rate converts to a variable interest rate. This type of interest rate means that you know for certain what your mortgage repayments will be for the fixed interest period, helping you to plan your finances.

Loan to Value
“Loan to value” is a definition of your mortgage as a percentage of the value of your home. If you have a property worth €200,000, and you are borrowing €184,000, your loan to value is 92%. Some lenders may offer lower variable rates if you borrow less than a certain percentage of your property value. For example if you borrow €200,000 and your property value is €400,000, you are borrowing 50% so your LTV is 50%. You may get lower rates if you loan is below a certain rate i.e. 60%.

Legal Fees
You will need a solicitor to make sure that that everything is legally in order. Solicitor’s charges can vary considerably, so it’s worth speaking to two or three before you make your choice. A solicitor should guide you through the jargon and help you ensure any ownership issues are sorted out (this is referred to as the ‘title’ of your house) so you don’t have legal problems and costs in the future. On top of your solicitor’s fee you should budget for legal searches (at least €80), and registration of the title (anything from €100 to over €850).

Rent a room scheme
Rent-a-room relief is a valuable benefit which allows taxpayers to rent out one or more rooms in their home, and receive up to €7,620 in rental income tax-free each year. If your rental income exceeds €7,620, you will be taxed on the full amount received, not just on the excess over the limit.

For example, if you receive income of €7,620 you will not have income tax liability, but if your income is €7,630, you could have a liability of up to €3,586, including PRSI, levies and income tax at the top rate of tax. When income arises for two or more people from one qualifying residence, the annual limit is divided by the number of people involved.
So for example a young couple renting out a room in their first house cannot receive income of €7,620 each without incurring any income tax liability. *see Buying to let above for deductions on your rental income for tax purposes.

One hundred percent mortgages
Most lenders will provide a percentage of the value of the property, i.e. 90% and you provide a deposit of 10%. However, some lenders will give you 100% of the value. The risks involved are that if house prices fall you could end up owing more than the value of your home (i.e. negative equity), and the risk of being under extra financial pressure in order to pay back a bigger amount, especially if interest rates go up again or your outgoings increase. If opting for a 100% mortgages you still need some savings to cover costs such as legal/valuation and maybe stamp duty.

Tracker Rate
This is a variable interest rate that tracks the European Base Rate* (also known as the ECB rate) with a margin that is fixed for the full term of the loan. The margin is dependant on the amount borrowed and the value of the property to be mortgaged. Any fall in the European Base Rate results in lower repayments but any increase means higher repayments.
*Since Ireland joined the euro zone in January 1999, the European Central Bank (ECB) mainly determines the interest rate charged by banks to customers. If the ECB rate is raised, the cost of borrowing for banks is increased, and this is passed on to the customer, resulting in higher repayments. However, if the ECB lowers its interest rates, the cost of borrowing decreases for the banks. This means lower interest rates and lower monthly repayments for you.

Understanding Auctions
An auction is a public sale where a property is sold to the highest bidder. If you are intimidated by auctions, it’s a good idea to go to one beforehand to get an overview of the process. If you are afraid that you will get carried away and exceed your limit, get someone else, (perhaps a solicitor or a friend) to do the bidding for you.
When you bid at an auction, you do so unconditionally. You will be asked to sign an unconditional contract immediately and hand over a 10% deposit. If you are unable to complete the purchase your deposit may be at risk. You should never attend an auction without first seeking legal advice. A reserve price is agreed by the seller and auctioneer before auction and the property will only be sold if the reserve price is reached. If the reserve price is not reached, the property is usually withdrawn from auction, and the auctioneer approaches the highest bidder to see if they can agree a price. Reserve prices are not revealed prior to auction and are set by the seller on the day. If there is strong competition, reserve prices may be exceeded.  

Valuation fees
The lender will need to carry out a valuation of your prospective home to check it is worth the money it is lending you. This will cost you approximately €125 to €150.

Yields, rental
When you are buying to let a property, the rental yield is the rate of return which does not include capital appreciation. The higher the yield, the more profitable the investment. Generally the higher the number of bedrooms the lower the yield (though Dublin city centre is an exception to this). The national average rental yield in Ireland is currently around 3.7%, with one bedroom properties coming in at 4.3%. The lowest yields are in south county Dublin as this is the most expensive place to buy property.