Real Estate and Housing

Key measures for real estate and housing

1. Rent a room relief – Higher threshold and increased application

The tax‑free threshold a homeowner can earn from renting a room in their property will increase from €14,000 to €16,000, a rise of €2,000.

This relief will also be extended to cover newly installed detached auxiliary dwellings between 32 and 45 sqm. This follows the introduction of revised planning rules earlier in the year, designed to make it easier for homeowners to add detached accommodation within the grounds of their homes.

The change will apply retrospectively from 27 July 2026.

2. Rent tax credit – Increase from 2027 and 2028

The rent tax credit will increase by €150 for individuals and €300 for those jointly assessed, bringing it up to €1,150 for single claimants and €2,300 for couples. The increased amounts apply to the 2027 and 2028 tax years.

3. Help-to-Buy Scheme – Higher maximum refund

First time buyers will be able to access up to €35,000 towards the deposit on their first home, under the Help-to-Buy scheme with immediate effect. This increases the limit by €5,000. The other parameters remain unchanged. The change will take effect from 7 October 2026.

4. Residential Zoned Land Tax (“RZLT”) – Further rezoning opportunity

Further rezoning opportunity for landowners to make a submission seeking a change in zoning of land appearing on the revised RZLT map for 2027, with the potential certain cases to secure an exemption from RZLT for 2027 where rezoning reflects genuine economic activity being undertaken.

5. Derelict Property Tax (“DPT”) – Scope and Timetable

DPT, announced in Budget 2026 and to be legislated for in Finance (No. 2) Bill 2026, will apply to residential and non-residential properties at 7% of their self-assessed value. Local authorities will identify derelict properties and maintain registers; owners may seek a review of their inclusion.

Preliminary registers are due 1 September 2027, final registers 1 March 2028, and the first Revenue pay-and-file deadline 23 June 2028. Detailed operation remains subject to legislation.

6. Reduction in the rate of Capital Gains Tax (“CGT”)

The standard rate of CGT is being reduced from 33% to 31%. This reduction applies in respect of disposals made on or after 7 October 2026. There will be no change to the 33% rate which applies to the disposal of development land.

7. Investments funds – Reduction in Investment Undertaking Tax (“IUT”) rate to 35%

The IUT rate has been reduced by 3% to 35% with a commitment to working on removing further barriers to investment (including deemed disposal) in the near term.

8. Irish Real Estate Fund (“IREF”) and Real Estate Investment Trust (“REIT”) Tax – No changes

No changes to the IREF or REIT tax regime were announced.

9. Direct expenditure

The direct expenditure measures announced included:

• €2.2bn to be allocated to Irish Water in 2027 for infrastructure investment.
• €3bn towards the funding of social housing delivery
• >€1bn to be allocated to deliver starter homes alongside the HTB initiative.

Deloitte's view on Budget 2027 measures

It was a quieter ‘Budget Day’ today for those in the real estate sector. Other than the previously flagged introduction of the DPT, there were new no major structural changes announced.

Those measures which were announced are consistent with a budget focussed on easing cost of living pressures. The increase in the Help-To-Buy credit available will be welcomed by first time buyers. The changes to the Rent Tax Credit and Rent a Room Relief, while marginal, should also contribute to easing of the financial burden at the household level.

For property owners, the proposed reduction in the standard rate of CGT is a welcome measure. The reduction in the standard CGT rate may benefit some property disposals, but the unchanged 33% rate for development land is a significant qualification for the sector.

The introduction of DPT is also a significant measure for property owners. Its application to commercial as well as residential property, at 7% of self-assessed value, may create a strong incentive to address dereliction. The practical impact will depend on how local authorities apply the inclusion criteria and how the review and remediation provisions operate in the final legislation.

The further RZLT rezoning opportunity is welcome for landowners carrying on genuine economic activity, although owners will need to weigh that potential tax benefit against the implications of changing a site’s zoning.

Overall, in Budget 2027, the lack of major surprises is a positive step towards policy stability. We look forward to more detail on the measures announced in the upcoming Finance Bill.