Budget 2026 – Property and Development Update

There has been a strong focus on housing in today’s budget, with several incentives introduced or extended to help to try to increase supply. The Real Estate team at Flynn O’Driscoll have summarised the more significant amendments touching on property owners and developers as follows:

• The headline announcement is the reduction of VAT on the sale of new apartments from 13.5% to 9% with effect from midnight tonight and which will remain in place until December 2030.
  ‍
• The government also introduced enhanced corporation tax deductions for costs incurred in the construction of apartment developments or the conversion of non-residential building into apartments, which will be available for projects where a commencement notice is submitted on or after 8 October 2025 and on or before 31 December 2030.  
  ‍
• Rental profits from residential schemes which fall under the Cost Rental Housing Scheme will be exempt from Corporation Tax.
  ‍
• The income tax deduction for small landlords (being landlords with less than three rental properties) who retrofit their properties has been extended for a further 3 years.
  ‍
• The Residential Development Stamp Duty Refund Scheme which allows a partial repayment of stamp duty paid on the acquisition of non-residential land which is developed for residential purposes has been extended to the end of 2030.
  ‍
• RZLT (Residential Zoned Land Tax) has been extended to next year with another opportunity for exemption afforded to those who wish to have their property re-zoned based on the economic activity carried on there.
  ‍
• A Derelict Property Tax has been introduced which will replace the existing Derelict Site Levy. It has been indicated that this would not be implemented prior to 2027. In the meantime, the Derelict Site Levy will remain in place, chargeable at 7% of the market value of the site.
  ‍
• Increased capital spending on infrastructure with funding of €1.4billion to Uisce Éireann to support new housing developments and improve water supply and funding of €3.5billion to ESB and Eirgrid for improvement works and infrastructure development.

‍

For more information please contact Majella Lynch or any other member of the Real Estate team at Flynn O’Driscoll.