Property Updates May 2021

Affordable Housing Bill 2021

The first changes have been laid out by the Minister for Housing Local Government and Heritage Darragh O’Brien, TD. Minister O’Brien introduced the Affordable Housing Bill 2021.

The Bill introduces three schemes aimed at increasing the supply of social and affordable housing. The three schemes are:

  1. Various provisions have been introduced to allow local authorities to deliver affordable housing on local authority lands.
  2. Cost rental model housing - under this scheme tenants pay rent for the cost only of the housing i.e. the building, managing and maintaining of the home. This scheme will allow renters to hold long-term tenancies of homes at lower than market price rents.
  3. Share purchase equity scheme - this is a scheme to help first-time buyers get on the property ladder. Under this scheme, the buyers will invest some of the equity in the home to the State to make the property affordable. Regional caps to pricing have been announced based on median prices.

In addition to the introduction of the above schemes, the Bill extends Part V of the Planning and Development Act 2000 to provide that 20% of developments are set up of social and affordable housing made up of a minimum of 10% social housing and 10% for affordable.

Stamp Duty Financial Resolution

In response to the recent political outcry arising from situations where institutional funds have purchased a large proportion of a residential estate, The Minister for Finance, Paschal Donohoe TD, has introduced new stamp duty measures to disincentivise bulk buying of residential property.

In summary, the measures introduce a new higher rate of Stamp Duty on residential property which the buyer will pay if they purchase 10 or more units in a rolling 12-month period. The new measures increase the rate of Stamp Duty on such residential purchases from 1%/2% to 10%.

The new Stamp Duty rate will trigger on the purchase of the 10th residential unit in the 12-month period but will apply to all houses i.e. it also applies to the first nine residential units purchased in that 12-month period.

Effective date

The measures apply to all buyers, institutional, international, domestic, corporate or individuals and will apply for purchases concluded on or after the 20th of May 2021.

Any relevant residential units purchased in the past 12 months from that date will be counted for the purpose of triggering the tax, i.e. if you had purchased six units in the 12 months to 20th May 2021 and purchased another five units on 20th May 2021 you will trigger the new rate. To avoid tax retrospection, in the example highlighted, the 10% rate will only apply to the five units bought after the new measures are effective. However, if you acquire nine units post 20th May 2021 and one more unit within 12 months of the purchase of the nine units, the 10% rate will apply to all 10.


The new measures do not apply to apartment purchases. The Minister has justified this exclusion on the basis that to apply the new measure to apartments would result in fewer apartments being built. From a supply perspective, this would appear measured, however, it is hard to see how this effect will not apply to reduce supply in the housing market.

Multiple purchases by the Local Authorities and Approved Housing bodies are also exempt from the provisions.

Indirect purchase of multiple units

Provisions are included to ensure multi-unit purchases indirectly through shares or units of investment funds are also included in the provisions.

Potential Impact

At a time when the supply of housing in Ireland has been delayed by the imposition of the longest construction sector lockdown in the world, this is an unwelcomed move that will further curtail the injection of capital into the construction of housing. Already, we have seen one social housing investment project paused as a result of the new measures which is completely counterproductive in an environment where you are hoping to stimulate supply.