Budget 2026: New derelict property tax, cigarettes up 50c, Vat rate cut for hospitality, pension and jobseekers' benefit up 10

"Both government parties know drastic action is needed to boost the level of supply and around €300 million of the €1.3 billion tax package has been earmarked for just that. Finance minister Paschal Donohoe was long sceptical about introducing tax breaks for developers but has just announced a widely expected Vat cut from 13.5pc to 9pc on the sale of new apartments for the next five years effective immediately."

"Having been grudgingly brought around to the idea, Donohoe will be hoping the cut - at a cost of €250 million in the first year - will boost the number of apartments in Ireland having collapsed since late last year. Browne was in the weeks leading up to the budget locked in tough talks with the Department of Finance over the options available to the government."

"An enhanced corporation tax deduction for costs incurred during apartment building will also be rolled out from tomorrow while rental profits from cost rental homes will be exempted. With an extra €200 million for Home Building Finance Ireland, the derelict sites levy has also been replaced with a new derelict property tax to be collected by revenue. The system whereby local authorities collect the levy has long been criticised due to low collection levels and millions in unpaid levies."

Government earmarked around €300 million of a €1.3 billion tax package to boost housing supply. VAT on new apartment sales falls from 13.5% to 9% for five years, costing about €250 million in year one. An enhanced corporation tax deduction for apartment-building costs and exemption of rental profits from cost-rental homes will be introduced. Home Building Finance Ireland receives an extra €200 million. The derelict sites levy is replaced by a new derelict property tax to be collected by Revenue. Enforcement mechanisms for the new tax remain unclear. Officials hope the measures will raise apartment completion numbers.

Read at Irish Independent