In Budget 2025, which was announced on Tuesday, 1 October 2024, the government committed to a number of measures related to housing. The housing and infrastructure measures showed a proactive and comprehensive approach to tackling the country's housing challenges; while supporting Ireland's wider economic and environmental goals. Significant investments have been committed to social and affordable housing and to critical infrastructure such as water services.
The following are the key takeaways:
Help-to-Buy Scheme:
This scheme was expected to end on 31 December 2025, this has now been extended to December 2029.
Mortgage Interest Tax Credit:
This tax credit has been extended for another year. The tax credit is for homeowners who had an outstanding mortgage balance between €80,000 and €500,000 on their primary home on 31 December 2022. The tax relief will be based on the increase in interest paid in 2024 relative to 2022 and will be capped at €1,250.00.
Rent Tax Credit:
The tax credit for people who are privately renting accommodation will be increased by €250 for the remaining months of 2024 and 2025. For an individual, this brings the tax credit up to €1,000.00 and €2,000.00 for a couple who are jointly assessed for tax.
Stamp Duty:
- The stamp duty on the purchase of 10 or more residential houses in a year, will increase from 10% to 15%, this will take effect immediately.
- A new stamp duty rate of 6% will apply to residential properties valued at more than €1.5 million. The 6% is applied to the amount paid above €1.5 million. The existing rates are 1% up to €1 million and 2% above €1 million. This takes effect immediately.
Tax Relief for Pre-Letting expenses for landlords:
The tax relief for pre letting expenses for landlords who bring vacant homes into the rental market has been extended to the end of 2027.
Vacant Homes Tax:
Increased efforts to combat vacancy and dereliction include €80 million expansion of Croí Cónaithe schemes, which refurbish vacant homes. This tax is set to increase from 5 to 7 times the property's existing base Local Property Tax rate. The increase is set to take affect from the next chargeable period, starting 1 November 2024.
Heat Pumps:
The VAT charged for installing a heat pump will be reduced from the standard 23% rate to the 9% reduced rate from 1 January 2025.
Residential Zoned Land Tax
Landowners carrying out genuine economic activity can seek an exemption from this tax in 2025 by rezoning their land to reflect this activity.
Water Infrastructure:
A €2.7bn package for Uisce Éireann to deliver necessary water infrastructure and support housing.
Social and Affordable Housing:
Coming into 2025, there is an expectation that 10,000 new build social homes are to be built. The government has committed a €6bn capital investment in housing for 2025 made up of exchequer funding, €1.25bn allocated to the Land Development Agency (LDA) and €1.65bn for the Housing Finance Agency (HFA).
We had hoped to see more incentives in the budget for the private sector to deliver and fund housing supply, but, notwithstanding that, it's clear that Budget 2025 demonstrates a clear and ongoing commitment to addressing housing supply.
For more information, please contact Fidelma McManus or your usual contact in Beauchamps.
About the author
Fidelma McManus
About Fidelma
Fidelma is a partner and heads our specialised Housing team. Fidelma has particular expertise in complex conveyancing and is an acknowledged market leader in the acquisition, development and management of social housing. Her practice includes all aspects of conveyancing and extends to the acquisition, structuring, financing, disposal and leasing of all types of property, including multi-unit developments, distressed and partially complete residential developments, shopping centres, retail parks and offices.