Budget 2026: New measures will provide certainty for housing investors, construction body says 

Vat on sale of completed apartments to drop from 13.5% to 9% from Tuesday night and corporation tax reduction among measures to stimulate housing construction

Chief executive of the Construction Industry Federation Andrew Brownlee said the Vat reductions out to 2030 as well as multi-year infrastructure spending would help attract private capital investment.

Construction incentives and additional spending on infrastructure announced in the budget provides more certainty for private capital to potentially to invest in housing in Ireland, the chief executive of the Construction Industry Federation has said.

In his speech to the Dáil, finance minister Paschal Donohoe introduced a number of changes in an attempt to incentivise housing developments, particularly apartment construction. He said he was reducing the Vat applied to the sale of completed apartments from 13.5% to 9% from Tuesday night until December 31, 2030.

“This reduction will help address the viability gap in apartment construction as part of a social policy to deliver more and higher-density apartments,” Mr Donohoe said.

Mr Donohoe has also committed more than €5bn in capital investment for housing delivery next year, in addition to investment by the Land Development Agency and approved housing bodies.

In terms of construction costs, he said he was 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”.

This will be available for projects where a commencement notice is submitted on or after October 8, 2025, and on or before December 31, 2030.

In addition to the above measures, Mr Donohoe said he was exempting the rental profits arising from homes that fall within the Cost Rental Scheme from corporation tax.

Chief executive of the Construction Industry Federation Andrew Brownlee said apartment developments were not going ahead “because they're not seen as commercially viable”.

“Finance is difficult to access. The risk profile is challenging. The costs are prohibitive. The changes to the apartment design specifications earlier on this year, the rent pressure zone changes, the planning changes, that will all help.

"I think the Vat change will certainly help the approved housing bodies, it will help the Land Development Agency and the cost that they have to deal with in terms of their development, but hopefully, it'll start to change that investment decision point for our private investors as well,” he said.

“That's what we really need to bring to the table if we're going to deliver the scale of housing that this country requires.” 

Mr Brownlees said access to finance was all about certainty and the Vat reductions out to 2030, as well as multi-year infrastructure spending, would help attract private capital investment.

"I think certainty around the Vat level, having that multi-year certainty is really, really important. Even the infrastructure stuff, knowing that there's now a commitment of multi-annual infrastructure investment that will support housing development. I think that's a critical factor when you have a major investor thinking about, do I bet on housing now," he said. 

Chief executive of estate agent Sherry FitzGerald Marian Finnegan said the adjustments to Vat and corporation tax “are positive, targeted steps that will enhance apartment construction viability”.

However, these benefits will require sustained effort, investment, and policy continuity to deliver the scale of housing our growing population needs.

Overall, the Department of Housing has been allocated €11.3bn for 2026.

Public expenditure minister Jack Chambers said €2.9bn would support the building of new-build social homes and the second-hand acquisitions programme, €1.2bn for the starter homes programme, €300m to support the regeneration of our towns and urban, and €205m would be allocated to a new housing activation infrastructure fund to support the work of the new Housing Activation Office.

Mr Chambers also announced a €3.5bn allocation to the ESB and EirGrid “to strengthen our energy security and accelerate our transition to renewable energy”, as well as €1.4bn “to increase the resilience and sustainability of water supply”.

Mr Brownlee said you “can't build 50,000 houses a year without energy, water and transport infrastructure”.

“So the money that's been allocated to Uisce Éireann, to ESB and EirGrid and to transport is really important.

"Policy intent isn't enough. Funding isn't enough. It has to translate to actual delivery and implementation on the ground, and that's really what our members need to see now."