Affordability and the chance to own a home is at the heart of Government’s housing policy, as embodied within the new housing plan, Delivering Homes, Building Communities 2025 – 2030. The plan reinforces and expands the range of existing measures being implemented by Government to tackle the issues of supply and affordability, under a new Starter Homes Programme, which will deliver an average of 15,000 starter home supports annually to 2030.
In order to further drive the delivery of starter homes under the new plan, local authorities will shortly commence the preparation of new Housing Delivery Action Plans (HDAPs), for review by my Department, setting out how the Starter Homes Programme will be implemented within their area. Delivery included within HDAPs will include cost rental, as provided by the Approved Housing Bodies, the Land Development Agency and the local authorities, as well as starter homes for purchase. These plans will be completed and published by the local authorities in 2026.
Cost Rental is a key element of the Government's strategy to improve affordability in the rental sector, to provide secure, long-term homes for moderate-income households. My Department is providing significant funding to delivery partners for cost rental homes. With this funding, all State-supported cost rental projects must achieve cost-covering rents that start at least 25% below comparable new properties in the private rental market, and therefore present a significant saving to the tenant from the outset. Though it was only introduced in 2021, cost rental delivery is accelerating, with over 4,800 homes already delivered by the end of Q3 2025, with a substantial future pipeline also now in place.
Cost-covering rents are different depending on a range of factors, including the size and typology of dwelling and the location, as well as the level of State funding towards the capital costs. Since rents for cost rental homes are set according to the actual costs of delivering, managing, and maintaining the homes, recent inflation in delivery costs has proven challenging. All delivery partners are actively managing costs to ensure that these new homes are provided at the best rents that are achievable.
In addition, the Government announced in Budget 2026:
• a reduction in VAT on the purchase of new apartments (down to 9% from 13.5%);
• enhanced Corporation Tax deductions on construction expenses to improve the viability of apartment building; and
• a Corporation Tax exemption for rental income from Cost Rental tenants.
Together these reforms aim to encourage delivery and increase viability of new cost rental homes, reducing costs and ensuing rents, therefore making them more affordable.
In parallel, the Government is focused on reducing construction and delivery costs more broadly through standardisation, improved procurement, and increased efficiency, while maintaining high quality and sustainability standards.
Quarterly housing delivery reports, including for cost rental delivery, will continue to be published on the Department's website, to track delivery under the Starter Homes Programme in each local authority area to 2030.