94 BUILDINGS

Housing measures may not deliver real price reductions

Aidan Scollard Oct 7, 2025

Although the reduction in VAT to 9% from the current 13.5% rate will give some relief for hard-pressed apartment buyers, the reality is that construction inflation for apartment builders still continues.

With demand continuing to exceed supply, there is a question mark over whether this will lead to real price reductions. Even with the VAT rate reducing to 9% a buyer would still be paying over €40k in VAT on the purchase price of a €500k home, which can be hard to justify in the current housing crisis.

The Minister for Finance also said he will introduce an enhanced corporation tax deduction for certain costs incurred on the construction of apartment developments. In the notes that have been published alongside the Budget speech, this relief is going to effectively be capped at €6,250 per apartment.

Aidan Scollard
Partner

So while some of the benefit should ultimately be passed on, this may not go far enough in improving affordability. It remains to be seen what costs will qualify for the enhanced deduction and whether the cap on spend per apartment will be achievable in the majority of cases.

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