Paschal Donohoe refuses to back boom-era tax relief

Finance Minister Paschal Donohoe poured cold water over the suggestion of tax breaks for developers. Picture: Brian Lawless/PA

The Government is to urgently move to review rent pressure zones (RPZs), draft new laws on compulsory purchase orders, and introduce restrictions on short-term lets.

However, a rift has emerged between Fianna Fáil and Fine Gael over the issue of tax breaks for developers, with Finance Minister Paschal Donohoe pouring cold water over the suggestion.

“What I’m not going to do is reintroduce or propose the very tax reliefs that did such harm to our economy and then the building of homes for many years in Ireland,” Mr Donohoe said, referring to Celtic Tiger-era reliefs for developers to build apartments.

However, Fianna Fáil sources have downplayed the potential tax breaks being considered, with suggestions that they would be both time-limited and targeted at developing brownfield sites rather than being broad brush measures.

One senior Fianna Fáil source said that Fine Gael is blowing the tax break proposals “out of proportion”.

“All things have to be on the table if we’re going to move things from 30,000 [houses a year] to 60,000 [houses a year],” another source said.

It comes as the Cabinet committee on housing met on Monday evening, with senior ministers agreeing to take a number of measures to address the housing crisis.

Several key proposals are to be prioritised, including a review of RPZs as well as progressing legislation to regulate short-term lets from sites such as Airbnb.

New laws to strengthen and streamline compulsory purchase orders will be introduced, while the Planning and Development Bill will begin to be implemented.

A new Strategic Housing Activation Office is also due to be established, which will be responsible for unblocking infrastructure delays.

Ministers have been instructed to prioritise the delivery of utilities, like water and electricity, to ensure that there are serviced sites available for housing delivery.

"Housing delivery is the number one priority for this Government,” a spokesperson for the Taoiseach and Tánaiste said. 

The Government has set itself ambitious housing targets. This will require an updated Housing for All.

It is expected that this reviewed plan will be completed by the summer.

Additionally, €450m of capital funding is due to be allocated towards building 3,000 social, affordable, and cost-rental homes over the next three years. 

The Cabinet committee also agreed to progress the Revised National Planning Framework. This includes allowing Housing Minister James Browne to issue directives to accelerate spatial planning.

Ministers also held discussions on rural wastewater schemes, to allow for smaller housing developments to take place across the country.

It comes as a new report outlines that the number of houses under construction at the end of last year fell compared to 2023.

According to the GeoDirectory residential buildings report, there were 22,251 homes under construction in the final quarter of 2024. This is a drop of 2.3% compared to the same period in 2023, where there were 22,777 houses under construction.

The highest levels of construction are in Dublin, where 18.7% of all residential building is taking place. Cork is in second place, with 13.5% of residential construction taking place across the county.

Meanwhile, later on Tuesday, Property Industry Ireland is expected to launch a new white paper outlining its own proposals to increase housing supply, including changes to rent controls.