Mac Donncha criticises tax break for apartment developers

Sinn Féin councillor Mícheál Mac Donncha has accused Minister for Housing James Browne of spending €640 million of taxpayers’ money on tax breaks for developers at the expense of renters.

Under the new measures as part of this year’s Budget, VAT on apartment purchases were cut from 13.5% to 9% on apartments that are already being built. 

The Donaghmede councillor said that as a result of the new measures, the rental market in Dublin Bay North would be greatly distorted as it has one of the highest levels of apartment development in Ireland.

The Donaghmede councillor challenged the government narrative that the measure was intended to “activate” the 40,000 apartments which have been granted planning permission but have not started construction.

Mac Doncha noted “the expects this measure to cost the taxpayer €250m in 2026 and €390m in 2027, yet there is no legal obligation on the sellers of apartments to pass on any of the VAT reduction to the purchasers.”

“The government did not say that virtually all of this money will go to apartments that are already under construction; developers who will benefit from this are already on site building these apartments.”

“In many cases they also already have buyers in the form of forward-purchase agreements with investment funds or Approved Housing Bodies and the Land Development Agency.”

He added, “the government is wasting €640 million of taxpayers’ money on apartments that are already being built. This is more than double the budget for affordable purchase homes in 2026 and 2027 combined.

He warned, “potentially not a cent of this money will activate unviable apartment schemes. Rather it will simply boost the profits of already profitable developers. A great proportion of that will be here in Dublin Bay North where many hundreds of apartments are being developed.

“This is an utterly wasteful use of public money. It should have been invested in the delivery of genuinely affordable homes for working people to buy.”