Housing Minister rejects claims increasing stamp duty on purchase of multiple properties would lead to rent hikes
Budget 2025 introduced a number of changes to stamp duty measures, with higher rates due to be applied to buyers of homes over €1.5m and bulk purchasers of housing estates.
While the clampdown on vulture funds buying entire estates had been anticipated, the rise in stamp duty on individual homes had not been expected.
People purchasing homes worth €1.5m or more will now have to pay 6pc stamp duty going forward.
Existing stamp duty of 1pc will continue to apply to properties worth up to and including €1m, and 2pc on properties worth over €1m, but less than €1.5m.
Mr Chambers said the increase will mean people who are better off will pay their fair share.
“I think people that can afford a home at €1.5m can contribute more to our stamp duty system and that’s why it was an appropriate revenue-raising measure,” he said.
It is anticipated that the change will generate €20m this year and a further €80m next year.
Meanwhile, Housing Minister Darragh O’Brien rejected suggestions that increasing stamp duty on the buying of multiple properties to 15pc would instead lead to further rent hikes.
Housing charities and opposition TDs have raised concerns that increasing the tax on bulk-purchasing will not deter investment funds from buying up entire estates, but will instead encourage them to set rents at higher rates when they do buy properties.
Mr O’Brien said he “disagreed” with that analysis because there are “very strong tenancy protections” in place. Both changes to stamp duty came into effect at midnight yesterday.
Among the other major announcements were the increase in the rent tax credit to €1,000 and confirmation that a measure aimed at penalising land hoarders will proceed next year.
The Help-to-Buy scheme – where first-time buyers can get up to €30,000 from the State for a home deposit – has also been extended until 2029.
It is important that the measure does not unduly impact landowners who carry out genuine economic activity on their land
However, landlords, homelessness charities and opposition TDs have criticised the Government’s efforts, with Sinn Féin finance spokesperson Pearse Doherty branding it a “giving up on housing” budget over the failure to increase housing targets.
Mr O’Brien said the Government will have revised housing targets completed by the end of this month.
A further 10,000 new social homes are due to be built next year in line with the Housing for All policy.
A total of €6bn capital investment will be made in housing next year including €3.1bn in exchequer funding, €1.25bn to the Land Development Agency (LDA) for affordable housing and €1.65bn for the Housing Finance Agency (HFA).
Executive director of the Simon Communities housing charity, Wayne Stanley said: “The Budget has delivered a stay-the-course allocation for the 10,000 social homes in line with Housing for All, but this is simply insufficient and we see another budget where the rhetoric of homelessness being a ‘top priority’ is not in evidence.”
Sinn Féin finance spokesperson Pearse Doherty had an onerous task picking apart a giveaway budget. Photo: Gareth Chaney
In its pre-Budget submission, the charity said 15,000 social homes would be needed each year to adequately address the housing crisis.
For the third year in a row, the Government introduced an increase in the rent tax credit, which reduces the amount of income tax that a renter has to pay in one year. It will be increased by €250 to €1,000 for individual applicants and €2,000 for jointly assessed couples for next year.
Budget 2025 announced measures for aspiring homeowners, mortgage holders, renters and landlords, but an organisation representing the latter said it was “deeply disappointed”.
The Irish Property Owners Association (IPOA) said the Budget “offers little hope at a time when countless landlords are leaving the sector, as they struggle to make mortgage repayments”.
Mr Chambers announced an extension of the relief for pre-letting expenses – capped at €10,000 per premises until 2027 – but the IPOA said this is “wholly inadequate in helping current landlords to meet rising operational costs”.
Meanwhile, it has been confirmed the Residential Zoned Land Tax will come into effect next February. However, site owners will be given the opportunity to avail of an exemption from the levy.
The tax has been planned for a number of years as an attempt to target land hoarding by developers and other individuals during the housing crisis.
Concerns had been raised that the planned tax could inadvertently affect active farmers whose land is also zoned for potential residential use.
“It is important that the measure does not unduly impact landowners who carry out genuine economic activity on their land,” Mr Chambers said.
He further announced that the vacant home tax will now increase to seven-times a home’s local property tax.
“It is also important that we maximise the use of existing housing stock,” he said.
