Global Daily Tax News, Tax Breaks For Households, Housing Announced In Irish Budget, (Oct 9, 2025)

Ireland's newly announced Budget includes several tax relief measures to support households and boost the supply of affordable housing.

In the area of personal income tax, the ceiling for the two percent rate band will rise to EUR28,700. The Budget also extends the USC concession that applies to those who have a full medical card and earn less than EUR60,000 per year so that the reduced rate of USC continues to apply for a further two years until the end of 2027.

The Rent Tax Credit will be extended for three more years, until the end of 2028, and the Mortgage Interest Tax Relief will be extended for a further two years, with a reduced value applying in the final year.

To support households, the Budget announces the extension of the nine percent rate of VAT on gas and electricity bills until December 31, 2030. The Budget also announces that the VAT rate will be cut from 13.5 percent to nine percent on food and catering businesses and for hairdressing services, with effect from July 1, 2026.

The Budget includes several tax measures that to boost the availability of affordable housing.

In the area of value-added tax, the VAT rate on the sale of completed apartments will be reduced to nine percent from 13.5 percent, effective October 7 until December 31, 2030.

Ireland is proposing a corporate tax exemption for rental profits arising from homes that fall within the Cost Rental Scheme, as designated by the Minister for Housing, Local Government, and Heritage from October 8, 2025, onwards.

Further, Ireland will introduce an enhanced corporation tax deduction for certain costs incurred on the construction of apartment developments, and for the conversion of non-residential buildings into apartments, for projects where a Commencement Notice is submitted from October 8, 2025, and before December 31, 2030.

A new Derelict Property Tax will be introduced, replacing the Derelict Sites Levy, which is currently charged at a rate of seven percent on the site market value. The new tax rate has not been announced but will not be below seven percent. Legislation will be tabled next year, preliminary registers of dereliction will be published in 2027, and the tax will be introduced as soon as possible thereafter.

The Residential Development Stamp Duty Refund Scheme will be extended until the end of 2030. This scheme provides for a partial repayment of the Stamp Duty paid on a deed of conveyance or transfer of land where the land is subsequently developed for residential purposes. A number of changes will be made to the scheme, including extending the two time limits that apply - for acquisition to commencement and commencement to completion - from 30-months to 36-months where an application for a Stamp Duty refund is made in respect of a large-scale residential development.

The Budget also announces a full Stamp Duty refund that may be claimed in respect of a multi-phase development at the commencement of the first phase of that development.

The income tax deduction for small landlords on retrofitting their properties will be extended for three years.