Simon Harris (Wicklow, Fine Gael)

I move amendment No. 31:

In page 97, to delete lines 36 and 37, and in page 98, to delete lines 1 to 19 and substitute the following:

“ “Supply and construction of housing as part of a social policy.

9B. (1) In this paragraph—

‘apartment block’ means a multi-storey building that comprises, or will comprise, not less than 3 apartments with grouped or common access;

‘completed’ has the same meaning as it has in section 94.

(2) The supply of immovable goods, as part of a social policy, which are or, when completed, will be—

(a) one or more than one apartment, used or to be used for residential purposes, in an apartment block, or

(b) an apartment block, used or to be used for residential purposes, but excluding any part of the apartment block that is not used or to be used for residential purposes.

(3) Services consisting of the development, until completed, of immovable goods to which subparagraph (2) applies.”,

(ii) in Part 3, by the substitution of the following paragraph for paragraph 14 (amended by subsection (1)(b)(ii)):

“Housing.

14. The supply of immovable goods used or to be used for residential purposes, other than immovable goods to which paragraph 9A or 9B(2), as the case may be, applies.”,”.

As I noted earlier, this section which was amended on Committee Stage provides for a temporary 9% rate of VAT in respect of the supply and construction of apartments and apartment blocks, as per our social policy. The temporary 9% rate of VAT on the supply of apartments came into effect on budget night, but the extension to the construction of apartments and supply and construction of apartment blocks, including student accommodation, came into effect today. The 9% rate will apply until 31 December 2030.

The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law is required to comply. In general, the EU VAT directive provides that all goods and services are liable to VAT at the standard rate, which, in Ireland is currently 23%, unless they come within provisions that permit the application of a lower rate. Under the EU VAT directive, member states may apply a reduced rate to the supply and construction of housing as part of a social policy. Ireland has currently two reduced rates – 13.5% and 9%. In order to stimulate the development of apartments, which is high-density housing, it has been decided, on social policy grounds, to apply the second reduced rate of 9% to the supply and construction of apartments and apartment blocks.

The legislation around VAT and property is complex. As such, I am bringing forward some further amendments to this section to ensure that the text is in line with VAT legislation and that it achieves the policy intention of the measure. It should be noted that the amendments brought forward on Committee and Report Stages do not increase the estimated cost of the measures because the changes do remain in line with the original policy intention. As data on actual sales of apartments is received, the Estimates may be revised over the coming years. My officials will continue to monitor the relevant data as it becomes available.

Affordability and the chance to own a home lie at the heart of our housing policy. The Government has introduced a comprehensive implementation strategy, which is in place to support the various affordable housing schemes now being delivered by a range of partners. A record €6 billion capital investment in housing was announced in budget 2025. This is made up of €3.1 billion in Exchequer funding, €1.25 billion allocated to the Land Development Agency and €1.65 billion for the Housing Finance Agency. This is the highest ever capital investment in the history of our country. In order to meet the housing needs of our people, however, there needs to be private sector involvement too. Private sector involvement is not a dirty phrase. It is important as we seek to increase the supply of homes right across this country. That is what this VAT measure does. It endeavours to reduce the viability gap that those who build apartments face when considering whether to advance projects across the country that have planning permission but where the sale of apartments may not have been deemed viable. That simply is what this is about.

Over the course of the past number of days we have taken measures to ensure that this reduced VAT rate applies to student accommodation, an issue that I know is very important to the Minister for further and higher education, making sure that the lower rate of VAT will also apply to purpose-built student accommodation and to approved housing bodies. This measure, which is consistently and constantly misrepresented by others, will actually have a benefit for people building social and affordable homes and student accommodation.

We have also made a change in the resolution that came before the House yesterday - obviously, it is linked to these VAT amendments - to make sure that the help to buy scheme can continue to be accessed by first-time buyers who are purchasing apartments that have been built at the lower rate. This measure cannot be seen in isolation. It is one of a number of measures we are taking to reduce the viability gap. While we are living through a housing emergency and while many measures to address that are being taken to address by the Minister for housing, Deputy Browne, and all of Government, it is worth noting that we have seen the highest number of first-time home buyers this year since 2007. This latest measure needs to be seen as part of the overall policy jigsaw that has been put together to significantly increase supply. I commend the amendment to the House.

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