The Government is going “to blow €250 million” on apartments already under construction under a budget measure that “makes absolutely no sense”, the Dáil has heard.
Sinn Féin housing spokesman Eoin Ó Broin said the reduction in VAT from 13.5 to 9 per cent for new apartments, which comes into effect from midnight, should only apply to units that begin construction from tomorrow onwards.
He said the move was a “blatant way” to increase large developers’ profits by an average of €25,000 for each apartment, as most already had buyers, and there was no obligation on builders to pass on the VAT reduction.
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The provision announced in Budget 2026 will apply to all apartments under construction as well as those yet to commence. Mr Ó Broin told the Government: “You’re going to blow €250 million on a so-called activation measure for apartments that are already under activation.”
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It would do nothing to improve affordability or viability, he said.
Minister for Education Helen McEntee, who introduced the measure for a vote in the Dáil on Thursday, said it was ”aimed at incentivising builders to build additional apartments”. It will apply to properties of at least two stories and at least three units. It will extend to student accommodation but not to apartments built over a business or as part of a hotel.
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Labour housing spokesman Conor Sheehan said the Government had no mandate for this because it was not mentioned in election manifestos or the programme for government.
“It certainly will not lead to a single additional apartment being built anywhere outside Dublin and possibly Cork,” he said.
Minister @Paschald has announced a reduction in the VAT rate on the sale of completed apartments to 9% from 13.5%, effective from tonight until the 31st of December 2030. #Budget2026 pic.twitter.com/SDhNi9x6ZM
— Department of Finance (@IRLDeptFinance) October 7, 2025
Independent TD Paul Gogarty said, “there’s more of a risk of the VAT reduction inflating the value of land” because the developers are going to make “supernormal profits”.
