We also consider how these developments build on the substantial package of housing, planning and tax measures introduced in recent years to support housing delivery and regeneration.
An essential element of the delivery of housing is the infrastructure to support that delivery.
The continued focus on efficient delivery of the €275.4 billion of public capital investment provided for under the National Development Plan for the period from 2026 to 2035, building on the work of the Accelerating Infrastructure Taskforce, is welcome. From a housing delivery perspective, investment in transport, water and electricity infrastructure will be critical in addressing capacity constraints that continue to delay or restrict the development of residential sites in many parts of the country.
While the scale of investment is significant, its impact on housing delivery will depend on the timely implementation of these projects and the creation of development-ready infrastructure capacity.
Measures in the Budget, now being implemented through Finance (No. 2) Bill 2026, that are aimed at increasing housing supply include:
The rent a room rental income ceiling will increase from €14,000 to €16,000 from 1 January 2027 and extension of the relief to cover Designated Auxiliary Dwellings installed within the grounds of the individual’s sole or main residence after 27 July 2026. The Finance Bill proposes that neither Principal Private Residence relief nor mortgage interest relief is affected for an individual who lets either a room or rooms in his or her home or an auxiliary dwelling within the grounds of his or her sole or main residence.
The rent tax credit is being increased by €150 to €1,150 for an individual and by €300 to €2,300 for a jointly assessed couple. The increased value applies to both the 2027 and 2028 tax years.
The current level of support available to first-time buyers under the Help to Buy (HTB) Scheme is whichever is the lesser of:
The maximum relief available under the Help to Buy scheme is being increased by €5,000, from €30,000 to €35,000. The increased maximum amount of relief of €35,000 applies to HTB claims where either the contract is entered into, in the case of a sale, or the first tranche of the mortgage is drawn down, in the case of a self-build, on or after 7 October 2026.
Finance (No. 2) Bill 2026 will provide for a further opportunity for landowners otherwise within the scope of Residential Zoned Land Tax (RZLT) for 2027 to make a submission requesting a change in zoning of land appearing on the revised map for 2027, due to be published by 31 January 2027, and, in certain circumstances based around the carrying on of genuine economic activity, being exempted from RZLT for 2027 on foot of such submissions. The timeline to request a zoning change is from 1 February 2027 to 1 April 2027. Local authorities must acknowledge requests by 30 April 2027 and notify landowners of their decisions by 30 June 2027.
An exemption is proposed where a zoning change request is submitted by 1 April 2027 and is acknowledged by the local authority, provided the land is not covered by a current residential planning application or an existing permission for residential development.
The Bill also introduces additional powers for Revenue to seek information from Tailte Éireann, including the land’s address, Eircode and registered ownership details, where this information is required to administer the tax.
While the additional rezoning opportunity is welcome, its practical benefit is likely to be limited to landowners who have no intention of developing affected land. It does not address broader concerns where development is delayed by factors outside a developer's control – such as infrastructure constraints, judicial review proceedings, planning appeals, utility connection constraints, or where deferred RZLT liabilities can arise on genuine development transactions, including forward-funding structures. Targeted amendments in these areas could improve the operation of the regime while preserving its land activation objective.
The Derelict Property Tax (DPT) was announced in Budget 2026 as part of the Delivering Homes, Building Communities 2025-2030 housing plan. The tax will be collected by the Revenue Commissioners and will be based on registers of derelict properties that are compiled and maintained by Local Authorities.
DPT will be introduced into the tax legislation as part of Finance (No. 2) Bill 2026. From 2027, Local Authorities will be responsible for identifying derelict properties and recording those properties on a register of derelict properties. The tax will apply to residential and non-residential properties, and the rate of the tax will be 7% of the self-assessed value of the property. At 7% of market value per annum, DPT represents one of the most significant recurring taxes ever applied to underutilised property in Ireland.
Properties will be identified as derelict if the Local Authority considers they are not in use, and are not suitable for use, as a dwelling, commercial, social or community facility. In determining whether a building is not suitable for use, a Local Authority will consider factors including but not limited to:
Certain national monuments and registered historic monuments are excluded and the Bill provides also for an exemption in certain cases where a property is affected by defective concrete blocks.
A preliminary register of derelict properties will be published and property owners will have a right to request a review of their property’s inclusion on this register. Requests for reviews will be managed within the Local Authority sector.
To avoid liability to DPT, owners will be required to take steps to ensure that their property is no longer considered derelict. This can be achieved through redevelopment, the demolition and clearing of any derelict structure or building, or through the sale of the property to an owner who will instead redevelop the property. The legislation provides for limited deferral of DPT in prescribed circumstances, including where remediation works are undertaken within specified timeframes. Property owners who successfully remediate derelict properties may ultimately qualify for extinguishment of deferred DPT liabilities, subject to satisfying the relevant conditions in the legislation.
In its first year of operation, DPT will apply to towns and cities with a population of 4,000 or more, based on Census 2022 data. In the second year of operation, the tax will expand to towns with populations of 2,000 or more. This phased approach supports the regeneration objective while moderating the initial administrative burden on Local Authorities. A total of 107 towns will be in scope in the first year, increasing to 171 in year two.
The key timelines for the first liability year for DPT are as follows:
There will be a similar cycle annually, with Local Authorities identifying properties between March and August each year and publishing preliminary and final registers in September and March respectively.
The DPT legislation distinguishes between the deferral and the extinguishment of a DPT liability. In certain circumstances, including where qualifying remediation works are being undertaken, where a relevant court order is in effect, while certain appeals or judicial review proceedings are ongoing, and for a limited period following the acquisition of a derelict property by an unconnected purchaser, a DPT liability may be deferred rather than immediately payable. A deferral does not in itself eliminate the liability. Whether the deferred amount ultimately becomes payable will depend on compliance with the relevant statutory conditions.
Where remediation works are successfully completed and the relevant local authority confirms completion, a deferred DPT liability may ultimately be extinguished rather than merely postponed.
For these purposes, "remediation works" are defined as construction works undertaken in respect of a derelict property included on a preliminary register. "Construction works" include the construction, alteration, repair, extension, demolition or dismantling of a property.
The details of the DPT and its implementation must be carefully considered to ensure that the tax targets genuinely derelict properties without creating disproportionate administrative or financial burdens for property owners. Engagement between the Government, local authorities, Revenue, landowners and industry representatives will be essential as the regime is developed and implemented. Lessons should be learned from the rollout of Residential Zoned Land Tax, where mapping issues, uncertainty regarding scope and administrative complexity created practical challenges for landowners, developers and local authorities.
A deduction will not be available for the DPT against other taxes, although a credit should be available where the property is also subject to Local Property Tax or Vacant Homes Tax.
Unpaid DPT carries interest at 0.0219% per day from the payment due date until the payment is made, equating to 8% interest annually. Unpaid DPT and accrued interest become a charge on the property. In extreme cases, where DPT remains unpaid for an extended period and the outstanding liability exceeds the value thresholds set out in the legislation, the property may ultimately vest in the State following a High Court process.
Although the standard rate of CGT is being reduced to 31%, the rate on disposals of development land, including shares in private companies deriving their value from development land, remains at 33%.
Development land is broadly defined as land whose market value exceeds its current use value. Landowners disposing of land suitable for residential or commercial development will generally be subject to the 33% rate.
Given the continued policy focus on increasing housing supply, consideration could be given to aligning the CGT treatment of development land with the general rate. A lower rate may facilitate land mobility and encourage the transfer of development sites to parties best placed to deliver new housing.
In recognition of their role as key stakeholders in the delivery of social and affordable housing as well as infrastructure and urban regeneration, from 2027 local authorities will be permitted to spend more, through additional expenditure from their own resources and through borrowing of up to €200 million annually. This will enable them to invest more in capital projects that are aligned with Government priorities.
In order to address the lack of housing supply, €9.4 billion has been allocated for housing in 2027, including:
A range of measures introduced in 2026 and earlier budgets continue to support housing delivery, development viability, home ownership and the rental sector.
The VAT rate on completed apartments was reduced from 13.5% to 9% from 8 October 2025 and will remain at 9% until 31 December 2030. The reduced rate also applies to certain site sales and development arrangements for apartment schemes.
For 2026, an exemption can apply where a landowner seeks rezoning to reflect genuine economic activity. Relief also applies while a third-party objection to a grant of planning permission is being determined.
Budget 2026 announced the introduction of DPT. Budget 2027 confirms the detailed framework for the tax, including a 7% charge and collection by Revenue based on local authority registers.
Before the Budget 2027 increase outlined above, Help to Buy provided first-time buyers with an Income Tax and DIRT refund of up to €30,000 towards the deposit on a qualifying new home or self-build, subject to the scheme conditions.
Existing supports include the Rent Tax Credit, extended to the end of 2028, enhanced relief for qualifying pre-letting expenditure, a temporary landlord tax credit, and an extended deduction for qualifying retrofit expenditure. The retrofit measure runs to 31 December 2028 and can now cover up to three properties.
Mortgage Interest Tax Relief has been extended to 31 December 2026. For 2026, qualifying homeowners may claim a reduced credit based on the increase in mortgage interest paid compared with 2022, subject to a maximum credit of €625 per property.
An enhanced corporation tax deduction of 125% of qualifying apartment construction costs is available, subject to a maximum additional deduction of €50,000 per apartment, for qualifying developments commencing between 8 October 2025 and 31 December 2030. The Residential Development Stamp Duty Refund Scheme has also been extended to developments commencing before 31 December 2030, with longer periods available for large-scale residential developments.
Rental profits from qualifying designated cost rental units qualifying on or after 8 October 2025 are exempt from corporation tax. Chargeable gains on a disposal remain taxable under the normal rules.
The Living City Initiative has been extended to the end of 2030 and broadened. Measures include extending residential eligibility to buildings constructed before 1975, supporting over-the-shop residential use, increasing the enterprise relief cap to €300,000 and adding Drogheda, Athlone, Dundalk, Letterkenny and Sligo to the designated areas.
A number of agricultural property reliefs, including Farm Consolidation Relief, Farm Restructuring Relief and Young Trained Farmer Relief, have been extended to the end of 2029, subject to the relevant commencement requirements.
Finance (No. 2) Bill 2026 continues the Government's strategy of combining direct housing expenditure with targeted tax measures aimed at increasing supply, supporting home ownership and encouraging refurbishment of existing property. While the increase in Help to Buy and the continued support for apartment development will be welcomed by the sector, the implementation of the Derelict Property Tax and ongoing concerns regarding the operation of the Residential Zoned Land Tax are likely to remain key areas of focus.
The significant increase in housing and infrastructure funding demonstrates the Government's continued commitment to addressing supply constraints. The effectiveness of many of these measures will ultimately depend on efficient implementation, planning delivery and the timely activation of development land.
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We examine the principal property-related measures announced in Budget 2027 and the provisions contained in Finance (No. 2) Bill 2026.
The Irish Government published Finance (No. 2) Bill 2026 (the Bill) on 19 October 2026. The Bill provides the legislative detail for a number of measures announced in Budget 2027, together with additional technical and administrative amendments.
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