Budget 2024 provides additional funding for housing

Beauchamps welcomes the allocation of additional funding for affordable and social housing announced by the Minister for Public Expenditure and Reform, Paschal Donohoe in his budget speech on 10 October. Some of the measures that will be supported by this funding allocation include €1.9 billion in capital funding in 2024 to deliver 9,300 new build social homes and €265 million to support the delivery of 6,400 affordable homes in 2024. In addition, €207 million will be provided towards bringing back into supply vacant and derelict units through the voids programme and Croí Cónaithe Towns Vacant Grant scheme and to support regeneration of towns through the Urban Regeneration Development Fund. 

Other property measures

The budget included some new property related measures and amended some existing schemes. 

• Rented Residential Relief: the budget introduces rental income relief for landlords at the standard 20% rate. The relief will be €3,000 for 2024, €4,000 for 2025 and €5,000 for 2026 and 2027, which is equivalent to a tax credit for landlords of up to €600, €800 and €1,000 respectively.
• Mortgage interest relief: a one-year Mortgage Interest Tax Relief for home owners with an outstanding mortgage balance on their primary dwelling house of between €80,000 and €500,000 as of 31 December 2022.  Relief will be available in respect of the increased interest paid on the mortgage in the calendar year 2023 as compared with the amount paid in 2022, at the standard rate of 20% income tax. The relief will be capped at €1,250 per property.
• Vacant Homes Tax: increased from three to five times the property’s LPT charge.
• Rent tax credit: increase the Rent Tax Credit from €500 per year to €750 per year for 2024 (for those not in receipt of other State housing supports and amend the scheme to allow parents who pay for their student children who have tenancies in ‘Rent a Room’ or ‘digs’ accommodation to claim the Rent Tax Credit. This will also be backdated to allow for claims to be made for the 2022 and 2023 tax years.
• Additional funding for Urban Regeneration: €207 million in funding aimed at bringing back into supply vacant and derelict units through the voids programme and Croí Cónaithe Towns Vacant Grant scheme and to support regeneration of towns through the Urban Regeneration Development Fund.
• Residential Zoned Land Tax (RZLT) the liability date for RZLT is extended by one year to allow for the planned 2024 review of maps to take place and to afford affected people with a further opportunity to engage with the process.

Missed opportunity?

In the run-up to the budget there were calls for specific measures designed to improve delivery of housing targets, which were not taken up by the government.  Those suggestions included:

• Help-to-Buy: The government was urged to raise the ceiling on the help-to-buy scheme from €500,000 to €600,000 to keep pace with inflation.  Whilst the Minister did extend the Help-to-Buy scheme extended to the end of 2025 and amended it to ensure that local authority affordable purchase scheme applicants can avail of the scheme, the thresholds were not mentioned in his speech.
• VAT on construction: Given the impact of high inflation on housebuilding costs, there were calls for a reduction in VAT on construction, but this was not mentioned in the Minister's budget speech.
• First Homes Scheme: Many predicted that the First Home Scheme (shared equity scheme) might be extended to second-hand homes, this hasn’t happened.

Comment

The Minister announced that just under €7 billion of funding will go to the Department of Housing, Local Government and Heritage, of which €2.6 billion will be capital investment in housing, supplemented by Land Development Agency investment and Housing Finance Agency lending, resulting in an overall capital provision for housing of over €5 billion for 2024. This continued commitment to Housing For All is very welcome.

For more information, please contact Fidelma McManus or your usual contact in Beauchamps.