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Budget 2026: What It Means for Ireland’s Property Market

The Irish Government’s budget announced in October 2025, introduces a series of measures designed to boost housing supply, encourage development, and improve affordability.
For property owners, developers, and investors, the latest budget brings a mix of opportunities and challenges — all of which will shape Ireland’s real estate market over the coming years.

Here’s a summary of the key property-related measures and what they mean for you.

 VAT Reduction on New Apartment Sales

One of the most significant announcements is the reduction of VAT from 13.5% to 9% on new apartment sales.
This lower rate applies from 8 October 2025 until 31 December 2030 and is designed to make apartment projects more financially viable — a critical move given the sharp rise in construction costs.

Impact:
This change is expected to reignite interest in apartment developments, particularly in Dublin and other major urban centres where build costs have constrained supply. Developers could see improved margins and faster project commencements.

 Tax Relief for Cost-Rental Developments

From October 2025, rental income from cost-rental housing will be exempt from corporation tax.
This measure aims to encourage institutional investors and approved housing bodies to provide more long-term, affordable rental accommodation.

Impact:
The exemption supports the growth of cost-rental schemes, offering tenants below-market rents while giving investors a stable, long-term return.

Introduction of a Derelict Property Tax

The government will replace the existing Derelict Sites Levy with a new Derelict Property Tax, administered by the Revenue Commissioners.
This new measure will apply a minimum 7% annual tax on the market value of long-vacant or neglected properties.

Impact:
The tax is designed to encourage redevelopment or sale of unused properties, which should help regenerate older parts of cities and towns, creating fresh residential opportunities.

 Adjustments to the Residential Zoned Land Tax (RZLT)

Budget 2026 refines how the Residential Zoned Land Tax is applied. Landowners now have a clearer path to appeal zoning classifications or request exemptions where the land’s zoning doesn’t reflect its actual use.

Impact:
While it adds flexibility for landowners, it still places financial pressure on those holding zoned land without developing it — encouraging more active use of development-ready sites.

 Stamp Duty Refund Scheme Extended

The Residential Development Stamp Duty Refund Scheme — which allows developers to reclaim stamp duty paid on land purchases for housing — has been extended until 2030.
The time limits for claiming refunds have also been adjusted to support larger and phased developments.

Impact:
This provides cost relief for developers acquiring land and further supports long-term housing delivery planning.

Expansion of the Living City Initiative

The Living City Initiative has been extended to 2030 and now applies to properties built before 1975, expanding eligibility for tax relief on refurbishments in urban renewal areas.

Impact:
This measure will encourage the refurbishment of older and vacant buildings, particularly in Dublin, Cork, Limerick, Waterford, Galway, and Kilkenny — promoting vibrant, mixed-use city centres.

 Increased Housing Investment & Supports

  • Over €5 billion in capital funding allocated for housing delivery in 2026.
  • An additional €200 million for Home Building Finance Ireland (HBFI) to support SME builders.
  • The Rent Tax Credit for tenants extended for a further three years.

Impact:
These measures signal continued government commitment to supporting both developers and renters, while expanding funding for new home construction.

 Market Outlook

Overall, Budget 2026 sends a clear message: the government is doubling down on housing delivery.
Developers benefit from lower taxes and renewed financial incentives, while owners of derelict or underutilized sites face new taxes that encourage redevelopment.

For investors, this means greater opportunities in cost-rental and apartment projects, as well as in urban regeneration where older properties can be revived for residential use.

In Summary

Budget 2026 reflects a strong push to stimulate construction, encourage redevelopment, and make renting more affordable.
While the measures won’t solve Ireland’s housing shortage overnight, they lay the groundwork for a more balanced and sustainable property market.

Martin Property Consultants will continue to monitor how these policy changes influence the Dublin property landscape and will keep our clients informed on opportunities and market developments.

📞 For property advice, valuations, or investment guidance, contact our team today.

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