WOULD A HOLIDAY HOME BE A BETTER USE OF MY €70K?

Q I have €70,000 in savings. It earns 0.3% interest – just €210 a year! I was thinking of buying a three-bed holiday home for €80,000. If we got one holiday a year in it, the value would be greater than the interest we’re getting from KBC. I would also hope to earn some rental income. But how much would we have to pay in property tax? A I think you are on the right track. We have to become more imaginative about where to invest our money as savings rates shrink ever smaller.

You are buying something you will enjoy and can’t really fail to beat €210 a year.

You will have to pay tax on any rental income you receive but will be able to write off a small amount of expenses in proportion to the time for which it is rented out. All in all, it won’t be worse than paying Deposit Interest Retention Tax on your paltry interest from KBC.

You will also have to pay property tax but that won’t be much as it is based on the property value.

This is calculated via a system of market bands.

The initial national central rate was 0.18% of a property’s value up to €1m. From January 1, 2015, local authorities could vary LPT rates -/+ 15% of the national central rate.

So it will vary, depending on where you are. Even at the full rate, it would be €90 for properties worth less than €100,000, at least up to 2019. A revaluation is due then but it’s hard to see the Government racking up property tax after the water charges debacle.

Unlike family houses, holiday homes are not in huge demand. They haven’t risen much in value and have been hard to sell. So your money could be tied up in it for a while. Q You recently wrote about how much you could save on importing a car from the UK. I have looked at this and the savings vary considerably. Some cars seem to offer minimal difference in price over there. Could you say which are the popular makes of cars being imported and how much could be saved on them? A You can make comparisons on autotrader.co.uk and carzone.ie Look at the average price and then add on Vehicle Registration Tax, which can be worked out with an online calculator on ros.ie

There are other handy calculators on a couple of helpful websites – ukcarimports. ie and motorcheck.ie The former is a car-importing service and the latter checks the car’s credentials for you, which is highly advisable.

As you already know, there are big variations in pricing. Motorcheck.ie reckons UK prices can be between 5% and 25% cheaper, which sounds reasonable given that sterling has fallen 20% in value since Brexit. Another complicating factor is that UK cars tend to have a much higher ‘spec’ with extras such as sunroofs and air conditioning much more common over there.

The most popular imported car is a Ford Focus

From a cursory search this week, a Ford Focus ecoBoost, 1-l in the UK was priced between €9,444 and €12,777.

In Ireland, it would cost between €14,000 and €18,000. The VRT would be around €2,500 (dependent on exact year and spec).

So yes, you could buy one in Britain for the same price as here but the chances are that if you look around, you will get a much better deal or, at worst, a car that costs the same but has a much higher spec.