Rent Tax Credit
The Finance Bill provides for the extension of the credit in its current form for a further three years to 31 December 2028, at a maximum value of €1,000 for a single individual and €2,000 for a jointly assessed couple.
Deduction for Retrofitting
The Finance Bill provides for the extension of the Income Tax relief for retrofitting expenses by landlords for a further three years to 31 December 2028.
Further changes are also provided for to allow claims for retrofitting expenses in the year of expenditure (rather than in the following year) and the number of properties for which landlords can claim the deduction is increased, from two to three.
VAT on Sale of Apartments
The Bill confirms the reduced 9 % VAT rate on the sale of apartments, which was introduced with effect from midnight on Budget night by Financial Resolution. The measure supports wider policy goals to deliver more and higher density housing and will end on 31 December 2030.
Cost Rental Income
The Bill provides for a Corporation Tax exemption in respect of the Cost Rental income arising from homes designated as Cost Rental homes under the Affordable Housing Act 2021. This exemption is being introduced to encourage interest in the provision of Cost Rental lettings and in doing so will assist the Government in meeting its target of activating 18,000 Cost Rental units by 2030.
Enhanced Corporation Tax Deduction for Apartment Construction Expenses
An enhanced corporation tax deduction of 125 % of certain apartment construction costs is being introduced to help address viability challenges in constructing apartments, and to incentivise their development. The enhanced deduction will be subject to a cap of €50,000 per apartment. This has the potential to deliver a cost saving of up to €6,250 per unit.
The enhanced deduction will apply to projects commenced on or after 8 October 2025 and no later than 31 December 2030, with the relief claimable upon completion.
Living City Initiative
The Living City Initiative (LCI) tax measure supports the enhancement of older housing and commercial stock in the designated Special Regeneration Areas in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford. It currently applies to owner-occupiers, rented residential properties and commercial premises.
The following changes are set out in the Finance Bill:
In addition to the measures set out in the Finance Bill, in his Budget address, the Minister for Finance announced his intention, over the coming period, to extend the LCI to the five regional centres in the National Planning Framework. These are Athlone, Drogheda, Dundalk, Letterkenny, and Sligo.
Residential Zoned Land Tax
The RZLT became due and payable in 2025. It seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. RZLT is an annual tax, calculated at 3 % of the market value of the land in scope.
Amendments included in Finance Bill 2025 will provide for a further opportunity for RZLT landowners to seek a change in zoning in 2026 to a zoning which reflects the economic activity they undertake on the land.
Provisions of the Bill will allow for exemption during An Coimisiún Pleanála Proceedings brought by a third party as well as other technical and consequential amendments.
Extension and Amendment of the Residential Development Stamp Duty Refund Scheme
Finance Bill 2025 provides for the further extension of the residential development Stamp Duty refund scheme. The date by which projects wishing to avail of this scheme must commence construction is to be extended from 31 December 2025 to 31 December 2030. Introduced in 2017, the scheme provides for a refund of a portion of the Stamp Duty paid on the acquisition of non-residential land where that land is subsequently developed for residential purposes. The net minimum stamp duty payable after a refund is 2 %.
As well as being extended by five-years, a number of legislative changes are also being made to the scheme to enhance its effectiveness, and to bring it more into line with current planning and housing policy. These include: