The Coalition is to bet heavily on boosting apartment building in the budget with a range of new measures, including a reduction in corporation tax on profits from the construction of some apartments.
The Irish Times has learned that alongside the well-flagged cut to VAT on new apartment sales, the Government was last night examining further measures. These include an exemption or reduction in corporation tax for companies building cost-rental properties, which are provided to tenants below market rents.
The VAT rate on new apartment sales will be cut to 9 per cent as part of a tax package that will also reduce VAT for food hospitality from next July, continue the renter’s tax credit and extend the lower VAT rate of 9 per cent on utility bills.
[ Live Coverage of Budget 2026 Opens in new window ]
Mortgage interest tax relief will also be extended for two years, but reduced for the final year. People will be able to claim the existing level of €1,250 for 2025, but €625 for 2026.
READ MORE
The living city initiative, which provides a tax incentive for refurbishing buildings in particular areas, will be extended to more large towns, while the Help to Buy scheme will be continued. Revenue will collect the derelict property tax as part of a clampdown effort.
Context
How important is the budget?
However, many households will face a squeeze with no income tax reductions and no electricity credits. Several departments were still locked in negotiations last night, with late approval confirmed for a €10 increase on weekly core welfare payments.
Child support payments will increase by €8 for children under 12 and €16 for those 12 and over. Back-to-school footwear and clothing allowances will be expanded to cater for two- and three-year-olds, while eligibility for the fuel allowance will be extended to those receiving the working family payment.
Income thresholds for the working family payments will go up by €60. The income disregard for the Carer’s Allowance is also expected to increase by €375 for a single person, allowing earnings of up to €1,000 per week, and by €750 for a couple, allowing up to €2,000 in weekly earnings.
The Department of Children and Disability was expected to get about €500 million more for the disability budget, with thousands more childcare places to be funded. However, negotiations on any childcare fee package were still ongoing last night.
The departments of health and of education agreed their budgets late on Monday evening, with an additional €1.5 billion for health to target regional access, safety, quality, prevention and productivity measures. There will be funding for 860 new special education teachers and a new DEIS+ scheme to address educational disadvantage.
The basic income for the arts scheme is to be put on a permanent footing from next September, replacing the current pilot. The student contribution fee will reduce by €500. Research and Development tax incentives are also expected to increase, as is the minimum wage.
