Ireland beckons, especially to retirees
Real estate prices on the Emerald Isle are about half what they are in the U.S., making it a great spot for retired people with plenty of equity in their U.S. homes. A tough economy, though, makes it a bad choice for younger people who need jobs.
Q. My wife and I live here, but we're both of Irish descent and have always dreamed of retiring to Auld Sod. What are prices like there? Is it a good place for retirees?
A. Ireland, where my late father's ancestors came from, is notorious for its boom-and-bust economic and real-estate cycles.
Right now, it's on the "bust" side, so I wouldn't move there if you still need a job to cover your monthly mortgage payments. But if you're retired and have lots of built-up equity in your U.S. home, the Emerald Isle could be a perfect retirement spot: House prices are down nearly 50 percent from their peak in 2007, with plenty of three-bedroom townhouses and even single-family houses in parts of Dublin now offered at $100,000 (U.S.) or even less.
Some lakefront cottages in rural areas are being offered at even lower prices. And sale commissions there are usually under 3 percent of the home's selling price, about half of what sellers typically pay in the United States.
The Irish government doesn't currently charge an annual property tax like we do in the states, though it does charge a 1 percent "transfer tax" upfront on the purchase of a typical home, as well as a sales tax on higher-priced properties. Usually, taxes also must be paid if the home is eventually sold at a profit, unlike most sales here, although one recent report from a respected Ireland-based research firm suggests that property values there won't catch up to their 2007 peaks until 12 years from now.
Of course, buying a home or land in nearly every foreign country entails lots of risks, obscure taxes and odd laws that we aren't familiar with in the United States. A good place to start getting more information about purchasing a home or land in Ireland is to call the Irish Embassy in Washington, D.C., (202) 462-3939, or to visit its American website, www.embassyofireland.org.
The largest Internet site of properties for sale in Ireland is www.daft.ie, which also includes lots of useful calculators and other information. Another good source of buying in Ireland and other foreign countries is a website operated by veteran globe-trotter and international real estate investor Kathleen Peddicord, www.liveandinvestoverseas.com.
Q. I want to buy my first home, and have heard that there's a difference between "good debt" and "bad debt." Is there really a difference? Would one type of these debts have a bigger impact on my credit score than the other?
A. Not really, though you might hear the terms "good debt" and "bad debt" bantered about frequently. The two terms are used more in social circles, rather than by lenders who are reviewing a home-loan application.
"Good debt" usually refers to money that was borrowed to further someone's career. A good example is a student loan, which is cash that is borrowed to help pay for educational expenses in order for the borrower to get a better-paying job in the future.
"Bad debt" is money that is borrowed for other purposes, like a flat-screen TV or high-tech sound system you might put on a credit card that will gobble up your monthly payments but won't help you make any money later.
Mortgage lenders, though, don't really differentiate between good and bad debt. They base their decision largely on whether you have made your monthly payments on a timely basis, your income and whether you seem to have the ability to make your monthly mortgage obligation and other payments in the future.
Q. I volunteered about 100 hours last year, serving food and cleaning up at a local homeless shelter. I know that I can't deduct the actual cost of the time that I could have made if I was working at my regular job, but can I at least deduct the fees I paid to park near the shelter and the cleaning supplies that I paid for out of my own pocket?
A. Bless your heart for helping those who are less fortunate than you. And yes, the Internal Revenue Service will let you write off most of your out-of-pocket expenses.
Your parking fees, as well as the cost of the cleaning supplies you purchased, are fully tax-deductible. You hopefully kept receipts, in case you get audited.
You can also deduct 14 cents for each mile you traveled to perform the charity work. But if your parking fees and other contributions totaled more than $250, you'll need a letter from the shelter that documents your support.
Order a free copy of IRS Publication 526, Charitable Contributions, by calling the agency toll-free at (800) 829-3676 or by downloading it from www.irs.gov.
Real estate trivia: The most common amenity wanted by homebuyers is a central air-conditioning system, a new survey conducted by the National Association of Realtors says, followed by a walk-in closet in the master bedroom and a room that's prewired for cable or satellite TV.
• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers, P.O. Box 4405, Culver City, CA 90231-4405.
© 2012, Cowles Syndicate Inc.
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