Budget ’26: Construction Industry Federation welcomes cut to VAT on new apartment sales and measures to increase housing supply

Press Release
Immediate Release
7 October 2025

Budget ’26: Construction Industry Federation welcomes cut to VAT on new apartment sales and measures to increase housing supply.

The Construction Industry Federation has welcomed the cut to VAT on new apartment sales in Budget ’26. The Government announced today that the VAT rate on new apartment sales will be cut to 9% from 13.5%.

Andrew Brownlee, CEO of the Construction Industry Federation, said:

“We welcome the reduction in VAT announced in the Budget today. VAT is a significant input cost and at a time of declining apartment completions (24% in 2024) this measure should increase the viability of many apartment schemes.

“Most apartment schemes under construction are purchased by Approved Housing Bodies and the Land Development Agency under various Government Schemes, so this measure should immediately reduce costs for those bodies.

“The reduction in VAT, as well as changes to the Corporate Tax rate for Cost Rental schemes and regeneration projects, coupled with recent changes to the apartment design guidelines and changes to the rent pressure zones, sends a strong signal to international investors in apartment construction that Ireland is a place to invest with a stable regulatory environment.

“We would be hopeful that all these changes will see a return of institutional and international investors. The Department of Finance estimate that to achieve 50,000 housing units per annum, our annualised investment in housing would need to reach €22 Billion per annum, and the only way to achieve this level of investment is attracting back international capital to the Irish residential market.”

Additional residential supply incentives were also welcomed by the federation.

Andrew Browlee said: “The extension of the Living City Initiative to 2030 and the inclusion of more urban centres and over the shop schemes should be very impactful. Other measures including the stamp duty refund for multi-phase residential development are also welcome.

“On infrastructure investment, we need more clarity on whether the additional €1.4bn of funding allocated for Uisce Eireann will be ringfenced for capital projects in water and wastewater to support the delivery of housing.

“We emphasise that sight of a reliable and timely pipeline of construction projects is required to enable the industry to plan ahead and ensure that it has the required resources to deliver, and we look forward to the action plan from the infrastructural division in November identifying details on sectoral plans.

-ENDS-

For media queries contact:

Meabh Smith
CIF Communications Director
0871338978