A number of initiatives to help people buy homes and assist with the housing market were announced in this week’s Budget.
In his Budget speech, Minister for Finance Jack Chambers said he wanted to give certainty to future homebuyers and the market. For renters, he said he wanted to recognise the cost-of-living pressures currently being faced.
Amongst the key housing initiatives announced in the Budget were:
- The rent tax credit offered to tenants will rise from €750 to €1,000, and to €2,000 for a jointly assessed couple
- An additional €1.25bn will be made available to the Land Development Agency, bringing the total amount of funding for the LDA to €6.25bn.
- The Help to Buy scheme will be extended until the end of 2029
- Properties worth over €1.5m will pay 6% stamp duty
- Existing 1% stamp duty to apply to values up to €1m and 2% above €1m
- Relief for pre-letting expenses for landlords extended for three years until the end of 2027 to help vacant property owners bring accommodation into the rental system
- Vacant homes tax increased from five to seven times the property's existing base Local Property Tax rate
Record capital funding of €6 billion is being made available for housing in the budget. This inclusive of €2 billion capital investment in social housing with the Housing For All social housing target for 2025 set to be a total of 12,365 homes.
The First Home Scheme will also receive an additional €80 million which will support the purchase of an additional 2,000 homes. This is in addition to the 5,400 purchasers that have been supported through the scheme to date.
In announcing the extension of the Help to Buy Scheme to the end of 2029, Minister Chambers said he hoped it would give certainty to future home buyers and to the market.
He noted that since its introduction, the scheme - which allows people seeking to purchase a new build home to claim up to €30,000 - has supported just over 50,000 individuals or couples buy their own home.
Another measure introduced in Budget 2025 will also see the value of the rent tax credit increase by €250, bringing it to €1,000 and €2,000 for a jointly-assessed couple for 2025
In recognition of the cost of living pressures facing many renters, Minister Chambers said he would also increase the credit for 2024 to €1,000 and €2,000 for a jointly-assessed couple. He also said to continue to help owners of vacant property to bring that accommodation into the rental system increasing the overall supply of rental accommodation, he would extend the relief for pre-letting expenses for landlords. This means that the relief will continue for a further three years, to the end of 2027, he added.
The Minister also said that Mortgage Interest Tax Relief, which was announced in last year's Budget and which provided relief for mortgage holders who experienced increased interest rates in 2023 over 2022, will be extended for one further year.
"This extension means that the relief will also be made available to assist mortgage holders in respect of the increase in interest paid in 2024 over 2022," he added.
There is an increase on the higher rate of stamp duty on bulk acquisitions of houses from 10% to 15% with immediate effect in an effort to discourage significant purchases of houses by investment funds.
"I share the concerns of aspiring home owners that the bulk acquisition of houses impacts on the number of houses made available for purchase," Mr Chambers said.
The rate of stamp duty applicable to residential property valued above €1.5 million will also increase to 6%. The existing rate of 1% will continue to apply to values up to €1 million, and 2% on values above €1 million, with a third rate of 6% to apply to any value in excess of €1.5 million, he added.
Meanwhile, under Budget 2025 measures, the rate of the Vacant Homes Tax will increase from five to seven times the property's existing Local Property Tax rate. The increase will take effect from the next chargeable period, starting in November.
The Minister also announced the extension of the 9% reduced VAT rate for gas and electricity for another six months to April 2025 as part of the Government's cost of living package to support households and businesses.
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