Housing a priority issue for Government in Budget 2027
STAMP DUTY
Budget 2027 is not expected to abolish stamp duty, as Simon Harris has ruled out the move despite calls from Taoiseach Micheál Martin and Fianna Fáil.
The current rate of one per cent applies to residential property up to €1 million and a rate of two per cent for houses valued at between €1m and €1.5m. The tax jumps to six per cent for homes valued over €1.5 million.
Property websites cite Fine Gael opposition, high costs, and fears it would inflate house prices as the reasons behind maintaining stamp duty levels.
HELP TO BUY
Housing Minister James Browne’s pitch to increase the Help-to-Buy grant ceiling by €20,000 was rejected.
Finance Minister Simon Harris stated there will be no increase in Help-to-Buy tax refunds or major changes for middle-income buyers.
RENT CREDIT
Currently, the Irish Rent Tax Credit directly reduces your income tax liability by 20 per cent of your eligible rent payments, up to €1,000 per year for single individuals or €2,000 for jointly assessed couples.
The credit applies per tenant rather than per property, meaning multiple people sharing a home can claim individually.
Tánaiste and Minister for Finance Simon Harris has signaled that the Rent Tax Credit is expected to increase from €1,000 to €1,200 (or potentially up to €1,300) for single individuals in Budget 2027.
Under proposed Budget 2027 changes, the tax credit for single filers may increase by €200-€300 and the couple’s rate is expected to scale up to €2,400 or €2,600 for joint assessments.
DERELICTS
A new Derelict Property Tax is expected to be introduced to tackle property vacancy and dereliction.
This will replace the existing Derelict Sites Levy with a more robust annual charging regime to bring empty buildings back into the housing supply.
RENT A ROOM
To alleviate student accommodation and urban rental shortages, the government is considering changes to the Rent-a-Room Relief scheme.
The current threshold allows homeowners to earn up to €14,000 tax-free per year by renting out a room. The tax-free allowance has not increased in 10 years but ahead of this year’s budget, an extension or increase to this cap has been floated to encourage more people to open up spare bedrooms.
The Rent-a-Room Relief can only be claimed by individual taxpayers and under the current system, the income you receive must not exceed the exemption limit of €14,000. If it does, then you are taxed on the total amount.
Higher Education Minister James Lawless was said to be seeking an expansion of the tax-free allowance to €20,000 to help boost student accommodation supply but various media is reporting that no final figure had been agreed by early this week.
LANDLORDS
The budget is expected to focus heavily on capital delivery funding for social and cost-rental schemes via local authorities and Approved Housing Bodies (AHBs).
To stem the ongoing exodus of private landlords from the Irish market, targeted tax incentives and extensions on retrofitting relief to keep existing rental stock active was being discussed at the top level.