Housing Policy

Thursday, 1 October 2026

Ceisteanna (113, 123)

Willie O'Dea

Ceist:

113. Deputy Willie O'Dea asked the Minister for Housing, Local Government and Heritage if he is planning to review the income criteria for cost rental. [69029/26]

Amharc ar fhreagra

123. Deputy James Geoghegan asked the Minister for Housing, Local Government and Heritage further to Parliamentary Question No. 990 of 18 March 2026, if progress has been made on the review of the qualifying income thresholds for cost rental housing developments. [67911/26]

Amharc ar fhreagra

Freagraí scríofa

Minister for Housing, Local Government and Heritage

I propose to take Questions Nos. 113 and 123 together.

As Deputies are aware, Cost Rental was introduced in late 2021 as an entirely new tenure in Ireland.

Since then its growth has been remarkable. We have delivered over 6,600 new cost rental homes by the end of Q1 2026 and have a substantial pipeline of future developments in place.

I know that there is significant demand for these homes, and I understand why. Tenants now have homes were they have strong security of tenure and rents well below market value. Recent ESRI analysis shows that there are substantial affordability gains, with rents on average almost 30 per cent below comparable private market rents. Feedback from tenants has also been extremely positive about the quality and management of the homes.

While we have delivered thousands of cost rental homes for thousands of families, we know there is more to do in delivering these homes at scale. This is why Cost Rental forms a key part of the Starter Homes Programme in the Government’s housing plan, Delivering Homes, Building Communities.

In order to deliver on that, the Government has committed significant funding and worked closely with delivery partners to bring forward cost rental projects at scale. Over €2.4 billion in Exchequer funding had been approved for cost rental projects since 2021.

Cost Rental is intended to assist moderate-income households, with new tenants required to have net household incomes of no more than €66,000 for homes in Dublin, and €59,000 elsewhere.

The Programme for Government includes a commitment to "keep the income criteria for cost rental under review”. These net income limits, which are calculated as gross income less tax, PRSI, USC, and pension contributions, are currently under review.

The legislation gives me broad scope to consider a range of factors when setting income limits, rather than tying the decision to any one single metric or issue. The relevant factors may include changing economic conditions, Government policy priorities, the current state of the Cost Rental sector, and future plans for the tenure. These issues are currently under consideration and any decision on changes to the limits will be communicated in due course.

As the Deputies may be aware, the legislation does not set a minimum 'income threshold' for Cost Rental tenants. As with any letting of a home, however, the landlord must consider the issues of affordability and tenancy sustainability. A landlord such as an Approved Housing Body, a Local Authority or the Land Development Agency will assess prospective tenants to ensure they can afford the rent over the long term, and to do this a landlord may employ financial metrics like a rent-to-income ratio. As a result, not every applicant may be considered an appropriate tenant for every available home, since rents will vary according to underlying costs. Landlords can, however, apply flexibility to their assessments, particularly where an applicant can demonstrate a history of meeting similar or higher rent in the private rental sector.

The Government is committed to driving down delivery costs of homes, as you have seen with measures introduced in last year's Budget, including a reduction of VAT on new apartments to 9%, to improve the viability of apartment development. At the same time, we are focused on reducing construction and delivery costs more broadly through standardisation, improved procurement, and increased efficiency, while maintaining high quality and sustainability standards. These measures help to address challenges posed by inflation and increasing delivery costs and help to provide more cost rental homes.

My Department and our delivery partners continue to actively manage costs to ensure that new cost rental homes are provided at the best rents possible so that we can deliver more homes for families at more affordable rents.