The Irish government is to introduce a law requiring insurers to cover property for a property’s initial purchase price, even if the property was purchased before the age of 65.
The changes will be rolled out on Monday, when property is eligible for a compulsory insurance premium on the initial purchase, as well as the property’s full value at the time of purchase.
It is not yet clear whether property buyers will be required to purchase insurance for the entire purchase, or only the first few years, according to the Department of Finance.
The policy will be introduced in stages, with insurers required to cover a maximum of €4,000 per property at purchase, and €5,000 at the end of the policy.
It is understood that the first year will be compulsory insurance.
“It will help those who are purchasing properties for the first time to get the right advice and make the right choice for their future property, regardless of their age,” Minister for Finance Paschal Donohoe said in a statement.
“This will provide a real incentive for owners to stay in their homes and make sure they can continue to make a profit.”
The move comes after a report by the Institute of Public Finance and Policy (IPFP) last year said Ireland was among the world’s least financially responsible countries for buying property.
It estimated that Ireland paid an average premium of €1,700 for every $1,000 of property in the country, and that more than half of that amount was on the property price alone.
The report also suggested that a property could be sold for less than €3,000, making it difficult for owners of older properties to recover their investment.
The new law is part of a €10 billion package announced last year by the Fine Gael-Labour government, which includes a €500 per-day levy on the purchase price of residential property and €600 on commercial property.
The Fine Gael government is also seeking to extend a tax credit to cover up to €1 million of property purchase costs.