Setting up a real estate business in Ireland is subject to the same steps for company formation as a company that will operate in any other business field. Once the incorporation phase is complete, the company founders can obtain the mandatory licenses as well as hire qualified and licensed real estate agents.
In this article, our team answers some of the most common questions concerning the incorporation, registration and licensing of a real estate business. For more details, as well as personalized assistance for opening this type of company (for local and foreign investors alike) please reach out to our company formation lawyers in Ireland.
What are the main rules of law regarding the Irish real estate sector?
Investors who want to set up a company in Ireland in the real estate sector should become familiarised with the main rules of law regarding this industry, which are represented by the Land and Convenyancing Law Reform Act. The registration of a real estate property in Ireland is governed by the Registration of Deeds and Title Act 2006. Another rule of law related to this sector refers to the Succession Act and our team of lawyers in Ireland can provide in-depth legal assistance regarding the regulations available in this sense, including matters of property division in case of divorce in Ireland.
The following video offers a short presentation on the registration of an Irish real estate business:
What are the licensing requirements for a real estate business?
Both the employer, the real estate company and the employee working for a company in this industry need to be licensed in Ireland. The license is issued by the Property Services Regulatory Authority (PSRA) in Ireland. The types of services for which it is required includes the following:
- the purchase or sale or land; the letting of land;
- the auction of property other than land;
- property management services.
According to law, property management services include administrative ones as well as those related to the improvement, insurance, servicing or repair of the development or any part thereof.
The following categories of providers are subject to licensing: companies, partnerships, sole traders, independent contractors, employees as well as principal officers. In a company or a partnership, at least one principal officer needs to be qualified to provide the services (this means having a license). If the licensed officer ceases his role within the company or partnership, another qualified officer needs to be appointed. Any change is notified to the Authority within 30 days of its occurrence.
The following documents are included in a business license application:
- the application form, filled in and signed;
- proof of qualifications for the principal officer and proof of Professional Indemnity Insurance;
- a report from the accountant and tax clearance;
- the company’s certificate of incorporation and the certificate name registration (if applicable);
- proof of license fee payment.
The accountant’s report will include information on the internal financial controls that will be introduced by the company in order to protect the client’s money. The tax clearance is issued by the Revenue Commissioners for all the company directors. Foreign directors obtain a non-resident tax clearance. Our team of lawyers in Ireland can help you with more information about this particular requirement.
Some of the relevant fees during this process include the following:
- 1,000 €: the license fee for a company, partnership or sole trader;
- 100 €: the license fee for an employee or a principal officer;
- 200 €: the fund contribution for a company, partnership or sole trader;
- 50 €: the fund contribution in case of an employee of principal officer.
The Property Services Compensation Fund was established in order to allow clients to be compensated for a financial loss suffered in relation to the licensee that provided the property service. This fee does not accompany a new application, it is required once the Authority has finished the application processing. Our team can give you more details.
What are the main taxes related to commercial real estate in Ireland?
When setting up a real estate business which sells or rents commercial properties, other regulations may apply than the ones available for residential properties. Just like in the case of residential buildings, commercial properties are the subject of a set of taxes, which can be paid by both the seller and the buyer, depending on the type of tax and our team of Irish lawyers can offer assistance on the tax requirements available in this case. The main taxes imposed during the sale of a commercial property are the following:
- stamp duty, imposed at the rate of 2% (calculated from the purchase price of the respective property);
- value added tax, imposed at the rate of 13,5%, which can be imposed in specific types of transactions;
- during the purchasing procedure, the buyer is required to offer a deposit of 10% of the property’s value;
- if the property is available only for rent, the stamp duty will be imposed at the rate of 1%.
How can we help you open a real estate business in Ireland?
Our team of lawyers in Ireland can help you comply with the licensing requirements for a real estate business, as well as handle the incorporation of the company from the earliest phases and all through the final licensing phase outlined above.
Some of the main steps required for company formation with which we can assist are the following:
- Choosing the business form: as seen above, a property services provider can take the form of a corporation, a partnership or a sole trader; we can help you decide which business form suits your needs base don budget and other criteria;
- Reserving the company name: all new companies, should you choose to incorporate a legal entity, need to have a unique name; our team can help with the name check and reservation;
- Prepare the company documents: the constitutive document of the company, the one that includes information on the name, registered office, directors and secretary as well as their statements, among others;
- Register the business: our team of lawyers will help you submit the articles of association and the forms needed to register the company with the Companies Registration Office.
We can also help you with subsequent registrations, such as those for tax purposes or throughout the process needed to hire employees.
Why invest in the real estate sector in Dublin?
Being the capital city of Ireland, Dublin provides a set of investment advantages related to the real estate industry. In this sense, investors should know that Dublin is ranked as the 7th European destination (out of 31 cities) for investments in the real estate industry. Companies operating in this sector can benefit from a healthy market and increasing renting demand deriving from corporate bodies operating on the local market.
Businessmen interested in setting up a real estate business may address to our law firm in Ireland for consultancy services. Our attorneys can advise on the business permits necessary for this activity and can help businessmen in choosing a suitable business available for their Irish company.
Our team of attorneys also offers other types of services, such as legal representation in case of divorce in Ireland.