Minister for Finance Paschal Donohoe has voiced strong opposition to the reintroduction of broad tax reliefs for developers, arguing that such measures, previously used during the Celtic Tiger era, were costly and ineffective.
Speaking in Brussels, Mr. Donohoe emphasized that history has shown these tax reliefs were “very, very costly” and difficult to target effectively.
“I will strongly be making the case that we should not bring in and reintroduce the reliefs that proved so costly,” he said.
However, he reaffirmed the Coalition’s commitment to increasing housing supply, noting that the focus should be on infrastructure improvements, planning permission availability, and land accessibility rather than tax breaks.
Government Divided on Private Sector Role
His comments contrast with remarks made by Taoiseach Micheál Martin, who recently stated that the Government needs to attract more private investment in the housing market as the State cannot meet demand alone.
While Mr. Martin acknowledged that politically difficult decisions may be necessary, Donohoe maintained that existing interventions, such as the Help to Buy and Shared Home Equity schemes, are the best approach.
“What I’m not going to do is reintroduce, or propose, the very tax reliefs that did such harm to our economy,” he insisted.
Housing Committee to Review Key Policies
The Minister’s remarks come ahead of a meeting of the Cabinet Committee on Housing, which is set to examine new priorities before publishing a comprehensive housing strategy later this year.
Among the proposals under discussion are:
An additional €450 million investment to build more social, affordable, and cost-rental homes in 2024-2025.
Revised planning rules allowing local authorities to zone more land for housing.
Regulations to curb short-term lettings, including legislation requiring Airbnb-style properties to register and comply with planning laws. The Government hopes this move could free up 12,000 homes for the long-term rental market.
Addressing rural wastewater treatment issues, which Tánaiste Simon Harris has identified as a major barrier to new housing in some areas.
Incentives to promote apartment construction, which may include cost-cutting regulations, innovative building methods, and standardized design plans.
The establishment of a Strategic Housing Activation Office to accelerate home building by resolving infrastructure-related delays.
Opposition Criticizes Government’s Housing Record
The Social Democrats have condemned the Government’s housing policies, calling them a “proven failure”. The party plans to introduce a proposal in the Dáil this week for a 100% stamp duty on bulk home purchases, aimed at discouraging investment funds from acquiring large quantities of residential properties.
Social Democrats TD Rory Hearne called for a shift in approach, urging the Government to adopt a model similar to France, where stricter rent controls and stronger state intervention have been used to tackle housing shortages.
Speaking on RTÉ’s Today with Claire Byrne, Mr. Hearne criticized suggestions that developer tax incentives could be reintroduced, stating:
“We all saw the damage that did. Instead, we need to retain rent caps, rent pressure zones, and introduce meaningful solutions.”
With housing affordability and supply remaining key political issues, the Government faces increasing pressure to balance market-driven solutions with direct state intervention in its upcoming housing plan.
