Ireland Extends Rent Tax Credit, Cuts Apartment VAT in Budget 2026

Ireland's Budget 2026 focuses heavily on addressing the housing crisis and supporting renters, with Finance Minister Paschal Donohoe prioritizing housing measures including a reduction of VAT on new apartment sales from 13.5% to 9% and extending the Residential Zoned Land Tax exemption to encourage land rezoning. The Rent Tax Credit, which offers tax relief on rental payments, has been extended until the end of 2028, benefiting thousands of households with credits up to €1,000 for individuals and €2,000 for couples. The budget includes a €9.4 billion package, with no personal tax cuts, but welfare payments will increase by €10 weekly, child support payments will rise, and there will be expanded eligibility for fuel allowance and carers’ allowance income disregards. Other key measures include raising the national minimum wage to €14.15 per hour, maintaining reduced VAT rates in hospitality, and extending various tax reliefs related to electric vehicles and film production. While the VAT reduction on apartments is welcomed as a positive step toward increasing construction, experts agree it alone will not resolve Ireland's housing shortage, signaling the need for more comprehensive solutions.