Dáil Éireann Debate, Thursday - 18 December 2025
342. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the research that was carried out by his Department into the potential fiscal and housing market impacts of the new tax reliefs for property developers announced as part of Budget 2026; and if he will make a statement on the matter. [70374/25]
Amharc ar fhreagraA well-functioning housing market is crucial to supporting labour mobility, improving competitiveness and ensuring that Ireland remains an attractive location for both domestic and foreign investment into the future.
The newly released National Housing Plan targets the delivery of 300,000 new homes from 2025-2030. High density housing, such as apartments, will form a significant portion of these, in line with changing demographics and in order to achieve national policies on compact growth aimed at creating more sustainable communities.
A number of reports have been published by my Department, most recently in June 2024: “The availability, composition and flow of finance for residential development”. This report found that there is reasonable access to finance for viable residential developments. However, there are certain segments in particular where viability is challenged and there is constrained access to finance, including funding apartment development for the private market.
The Deputy may also be aware of the recently published Society of Chartered Surveyors Ireland report “The Real Costs of New Apartment Delivery 2025”, which found that State interventions are playing a critical role in closing the financial viability gap, while also noting that affordability remains the key challenge.
The report reveals through detailed case studies that State interventions are helping to bridge the financial viability gap. The analysis shows that, without Government initiatives, just 2 out of 6 apartment types are viable, whereas with State interventions 5 out of 6 are viable.
Even with record levels of State spending allocated for housing, private capital will also be required to meet our housing needs. As such, it is important to create an environment where we can continue to attract private investment, both domestic and international.
For this reason, Budget 2026 contained a number of measures to support the housing sector, and particularly the construction of apartment developments. These include the reduction in VAT on apartments, the enhanced corporation tax deduction for certain apartment construction costs, a corporation tax exemption for rental income from Cost Rental dwellings and enhancements to the Living City Initiative, which encourages people to regenerate and live in historic buildings in the centre of Irish cities, including its extension to the five regional centres of Athlone, Drogheda, Dundalk, Letterkenny and Sligo.
Apartment development at scale will play an important role in meeting our housing targets. However, in recent years we have seen a retrenchment of private capital from the funding and development of apartments, because these developments are costly, capital intensive and higher risk. Investment in the Private Rental sector in Dublin is estimated to have fallen from €2.0bn in 2019 to €166m in 2024.
The measures introduced in Budget 2026, in tandem with more structural measures related to areas such as planning, apartment design and infrastructure, are all elements of a whole of Government approach aiming to improve viability, increase supply and help create a long-term sustainable housing system that reflects our nation’s needs.
