Louise Burne: Back and forth over shed laws shows unease still lodged between coalition parties
One Government source noted that neighbour wars are now a real possibility, as some people will not want one of the units in the back garden next door.
Every week, political journalists gather in the Government Press Centre in the basement of Government Buildings on Merrion Street to be briefed on the Cabinet agenda.
The Government press secretaries provide details on the memos, fielding questions about the coalition’s latest plans or giving their political masters’ opinions on the hot topics of the day.
However, during April 1’s briefing, the thing that journalists had the most questions about was the one thing not on the Cabinet agenda.
A Sunday newspaper had reported on the Government plans to allow modular homes, dubbed “beds in sheds” by some in opposition, to be considered as part of the rent-a-room scheme. The scheme allows people to rent out a room in their home tax-free up to €14,000 a year.
However, when Cabinet sat the following Wednesday, the memo was not on the agenda. There had been back and forth, and the memo was not ready, the press secretaries said.
However, in the background, there was disagreement brewing between Fianna Fáil and Fine Gael about who should be allowed to occupy the units, and how rent should or should not be charged.
The programme for government committed to examining
the “requirement for exempted development to the rear of a dwelling to be physically attached to the main dwelling house”.
In February 2025, junior planning minister John Cummins brought the question into the public realm.
At the time, Government sources said the changes could provide an “alternative housing option” that would “enable both younger and older generations to live within their own communities”.
The initial proposal was that only families would be allowed to live in the back garden units. However, Fianna Fáil sources have now said that while that may have been the Fine Gael position, it was never their “Government position” or that of housing minister James Browne at “any point”.
They wanted to see what the public consultation would return.
When the results of the public consultation came through, the question of whether the units could be rented out or offered under the rent-a-room scheme started to come into play.
Many of those who responded questioned whether the occupation of modular units could be expanded beyond family members.
In the late autumn, shortly before the publication of the Government’s new housing plan, there was a meeting with the independent TDs in Government, who made it “clear as a group” that they wanted it “beyond family”.
The idea of the rent-a-room scheme was favoured by Fine Gael. Fianna Fáil started to question how the units could be “rented”.
“It became clear that one arm of Government thought that it would be better to also allow these for rent,” one source explained.
As a “compromise”, there were conversations about what restrictions could be placed on the units if they were to move beyond familial occupation.
At a leader's level, there were conversations about whether renting a room would function as a “cap” of €14,000 a year on these units, and whether it was practical and legal to make the changes.
By early March, it was agreed that rent-a-room would be applied to the modular units.
However, it is understood that in the weeks that followed, there were questions from senior Fianna Fáil ministers about whether it should be restricted at all.
Despite what the Government press secretaries said on April 1 about the memo just not being ready for Cabinet, senior Government sources told the that it was.
In the background, back and forth continued between Fianna Fáil and Fine Gael.
Because of the new rental rules, which give tenants a six-year lease, it was accepted that any arrangement could not be a tenancy. This would result in anyone who wanted to rent a modular unit in their back garden not being able to sell their house for six years.
Licencing agreements are currently used for the rent-a-room scheme, but do not give tenants protections from the Residential Tenancies Board (RTB). This led to concerns about what this could mean for those living in them.
This resulted in an 18-month review being put in place.
Fianna Fáil sources noted that Taoiseach Micheál Martin said earlier this week that these units can cost €80,000 or more.
They argued that if they were spending this much money, they might want to rent it out in some fashion. A “practical” agreement had to be found.
In the end, as the memo finally made its way to Cabinet earlier this week, it was agreed that the rent-a-room scheme would be put in place, but that they could also be rented out on the market. If the landlord charges more than €14,000, they waive all entitlements to the tax entitlement.
It was also agreed that the main house would have to be owner-occupied.
All sides of Government described what was agreed this week as a “landing zone” or a “compromise” and insisted that everyone is now on the same page and happy with the plans.
However, the back and forth is indicative of the ongoing uneasiness and differences of opinion that are dominating this coalition.
Now that they are back on the same page, the Government will have to begin defending the plans as the parliamentary scrutiny begins.
One Government source noted that neighbour wars are now a real possibility, as some people will not want one of the units in the back garden next door.
The war between Fianna Fáil and Fine Gael also looks set to continue.
- Louise Burne is a political correspondent with the
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