A number of initiatives to help people buy homes and assist with the housing market were announced in Budget 2026.
In his Budget speech, Minister for Finance Paschal Donohoe said there was a need to build more homes, with a number of property-based initiatives announced. These include:
- €11.3bn for the Department of Housing.
- VAT rate reduced on sale of completed apartments
- €5bn in capital investment for housing delivery
- A new Derelict Property Tax will be implemented and collected by Revenue
- Rent Tax Credit extended for a further three years
- Mortgage Interest Tax Relief to be extended for two years
- Reduced 9% rate of VAT on gas and electricity bills extended until December 2030
- Living City Initiative extended
- Tax exemptions on certain rental profits and tax deduction on apartment construction
- €1.4bn for Uisce Éireann to support new housing developments
- €200 million of additional external funding for Home Building Finance Ireland
- Income tax deduction for small landlords extended for three more years
- The Residential Development Stamp Duty Refund Scheme has also been extended
Budget 2026 will allocate €11.3 billion in funding to the Department of Housing, Local Government and Heritage, according to the Minister for Public Expenditure and Reform.
The Finance has announced a reduction in the VAT rate on the sale of completed apartments to 9% from 13.5%. The change will apply until December 2030.
Minister Donohoe said the reduction will address the viability gap in apartment construction. He added it is part of a social policy to deliver more and higher density apartments.
In terms of cost rental housing, the Government is exempting the rental profits arising from homes that fall within the Cost Rental Scheme from corporation tax.
It is also introducing an enhanced corporation tax deduction for certain costs incurred on the construction of apartment developments, and for the conversion of non-residential buildings into apartments, to improve the viability of such developments.
It will be available for projects where a commencement notice is submitted on or after 8 October 2025, and on or before 31 December 2030.
Minister Jack Chambers said €2.9 billion will go towards the delivery of new-build social homes and the acquisition of second-hand housing.
Almost €2 billion will be directed towards social support programmes including the Housing Assistance payment, Rental Accommodation and Social Housing Current Expenditure Schemes.
Budget 2026 will allocate €1.2 billion towards the Government's starter homes programme, which includes the Help to Buy initiative.
There will be €300m provided towards the Urban Regeneration Development Fund, Minister Chambers said.
Just over €200m will go towards a new housing activation infrastructure fund, to support the work of the Housing Activation Office.
Meanwhile €140m will go towards the retrofitting of social homes, with a further €130m earmarked for up to 17,000 grants to adapt homes for older people and people with a disability.
As part of the Budget initiatives, the Government announced a new Derelict Property Tax, which will be implemented and collected by Revenue.
"Dereliction is a blight on our towns and cities," Minister for Finance Paschal Donohoe said in his budget speech.
"We need to bring those properties currently lying empty back into use," he added.
The new tax will replace the Derelict Sites Levy, which is currently charged at a rate of 7% on the site market value.
"I do not intend for the new tax to be charged at a lower rate than this," Minister Donohoe said.
The Finance Minister said he plans to bring forward legislation providing for the new tax in 2026.
"Preliminary registers of dereliction will be published in 2027 and the tax will be implemented as soon as possible after this date," he said.
The Rent Tax Credit, which was introduced in Budget 2023 and was due to expire at the end of 2025, is to be extended for a further three years, to the end of 2028.
Mortgage Interest Tax Relief will also be extended for a further two years with a reduced value applying in the final year.
It was also announced that the reduced 9% rate of VAT on gas and electricity bills is to be extended until 31 December 2030.
"This should go some way to alleviating energy cost pressures across the year for households," Mr Donohoe said.
Moving on to the Government's 'Living City Initiative', Mr Donohoe announced supports for the "enhancement of older housing and commercial properties" in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford.
These include increasing the scope of the initiative to include residential properties built before 1975.
The Residential Development Stamp Duty refund scheme will also be extended to the end of 2030.
This scheme provides for a partial repayment of the Stamp Duty paid on a deed of conveyance or transfer of land where the land is subsequently developed for residential purposes.
Meanwhile, the income tax deduction for small landlords who retrofit their properties will be extended for three years.
Rental profits arising from homes within the Cost Rental Scheme will also be exempted from corporation tax.
An enhanced corporation tax deduction will also be introduced for certain costs on the construction of apartment developments.
The Government will also provide €1.4 billion to Uisce Éireann in 2026 to support new housing developments and to improve the country's water supply.
"This will help to further progress development of waste treatment plants across the country," said Minister Chambers.
Previously, Minister Donohoe announced €200 million of additional external funding for Home Building Finance Ireland, which provides finance to homebuilders across the country.
In a bid to support the upgrading of rental housing stock, the Government will also be extending the Income Tax deduction for small landlords who retrofit their properties for a further three years.
"These measures are designed to encourage more stock into the housing market and to support the development of higher quality homes," Minister Donohoe said.
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