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13 October 2023
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Budget 2024 – Property & Real Estate Key Measures

  1. HELP TO BUY SCHEME (HTB)

The Help to Buy Scheme is a tax rebate available to first-time buyers to purchase a newly built or self-built house or apartment where the cost of that purchase is below €500,000. The tax rebate is provided by way of a refund of the Income Tax and Deposit Interest Retention Tax (DIRT) that a purchaser has paid for the 4 years before the year of application. The HTB Scheme was increased in July 2020 so that first-time buyers who meet certain criteria could apply for a tax rebate up to a maximum of €30,000 or 10% of the price of the new build (whichever is the lesser).  The enhanced HTB scheme (EHBS) is applicable from 23 July 2020 to 31 December 2024.

In Budget 2024, the EHBS was extended to 31 December 2025 and was also amended to allow applicants using the Local Authority Affordable Purchase Scheme to buy their home to qualify for the EHBS.

  1. VACANT HOMES TAX (VHT)

A Vacant Homes Tax was introduced by the Government in 2023 to prompt an increase in the supply of residential properties available for rent or purchase. It applies to any residential property occupied for less than 30 days in a 12-month period, from 1 November to 31 October of the following year. Budget 2024 has increased the applicable tax rate from three to five times the rate of Local Property Tax on that property and the property owner of the property is liable to pay the VHT. The Revenue Commissioners recently identified  approximately 25,000 properties that may be subject to VHT. Evidently, the implementation and enforcement of this tax could go a long way to alleviating some of the pressure on the current crisis in the housing market.

  1. RESIDENTIAL ZONED LAND TAX (RZLT)

The Residential Zoned Land Tax applies to land which is serviced and zoned for residential purposes by encouraging landowners and developers to build residential developments on those lands. Originally introduced pursuant to the Finance Act, 2021, owners of lands which are zoned under the RZLT were to be taxed at a rate of 3% of the site’s market value from 1 February each year commencing in 2024.

However, under Budget 2024, the said liability date has now been deferred to 1 February 2025. The process for identifying lands which will be subject to the RZLT is being undertaken by the local authorities and this mapping process will now continue throughout 2024 and 2025. Previously any landowners who maintained that their lands should not be designated under the RZLT were entitled to make submissions to their local authority up until 1 June 2023. The extension of the liability date enables the landowners to engage further with the local authorities in respect of the mapping process and their submissions.

  1. RENT TAX CREDIT

A Rent Tax Credit (“the Credit”) has been available to tenants since 2022 and will be available until 2025. The Credit reduces the Income Tax that a tenant is due to pay. The amount of the Credit which can be claimed depends upon the amount of rent paid and income tax paid. The Credit is available where rent is paid for one’s principal private residence, on a property used to facilitate attendance at work or an “approved course” (an undergraduate or postgraduate course provided by publicly funded universities, colleges and institutes of higher education in Ireland). The rent payment must have been made under a tenancy entered into with the consent of the landlord.

Accordingly, parents who pay for their student children in full-time accommodation, such as “digs” or room rental arrangements in order for their children to attend an approved course will also be able to claim the Credit. This will be backdated to allow for retrospective claims for 2022 and 2023.

The maximum amount claimable under last year’s budget was €500 per individual. This has been increased to €750 per individual under Budget 2024.

  1. LANDLORD’S TAX CREDIT

A new tax credit for landlords has been launched under Budget 2024 whereby they will benefit from a tax break worth between €600 and €1,000, rising each year that they remain  in the market, up to 2027. In the first year, €3,000 of income will be taxed at the standard 20 per cent rate rather than the higher rate (meaning €600 extra to the landlord), increasing to €4,000 in 2025 (a benefit of €800 in their pocket) and €5,000 for the subsequent two years (translating to the full €1,000).

  1. MORTGAGE INTEREST TAX RELIEF (MITR)

Budget 2024 has introduced a new temporary mortgage interest tax relief for twelve months for taxpayers who have an outstanding mortgage balance of between €80,000 and €500,000 on their principal home on the 31 December 2022. MITR will be available in respect of 2023, on the increased interest paid on the mortgage in 2023 over the interest paid in 2022. The tax relief on the increase is 20% and will be capped at €1,250. This is welcomed by mortgage holders who have been impacted by the successive interest rate increases from the European Central Bank, who will benefit from the relief.

  1. DEFECTIVE CONCRETE PRODUCTS LEVY

The defective concrete levy is a levy (rate of 5%) that applies to the first supply of certain concrete products. This levy is applied to the open market value of the concrete product on the date of their first supply. Budget 2024 abolishes the application of the levy to the pouring of concrete used in the manufacture of precast concrete products, with effect from the 1 January 2024. Those who discharged the levy payable in respect of the pouring of concrete between 1 September 2023 and 31 December 2023 are entitled to reclaim it under the refund scheme being put in place.

This Moran & Ryan LLP material is not intended to provide, and does not constitute or comprise, legal advice on any particular matter and is provided for general information purposes only. You should not act or refrain from acting on the basis of any information contained in this material, without seeking appropriate legal or other professional advice.

Louise WrightLouise Wright
Partner
T: + 353 1 5450374
E: lwright@moranryan.com

profile-image-Aideen-VealeAideen Veale
Senior Associate
T: + 353 1 8725622
E: aveale@moranryan.com

Matthew CarrollMatthew Carroll
Associate
T: + 353 1 8725622
E: matthewcarroll@moranryan.com