Emer Currie (Dublin West, Fine Gael)
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131. To ask the Minister for Finance if his Department has engaged with the Department of Children, Disability and Equality to develop a mechanism through the tax system to help lower the cost of fitting out childcare buildings that were built as a condition for planning permission for residential developments; and if he will make a statement on the matter. [39430/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government 2025 ‘Securing Ireland’s Future’ recognises that early childhood is the opportune time to shape a child’s development and build a secure foundation for their future and contains a range of commitments to build an affordable, accessible and high-quality early childhood education and care system.

Measures are in place which support the provision of childcare facilities, and these are primarily focussed on capital costs and on supporting parents in meeting the cost of childcare.

My colleague Minister Foley and the Department of Children, Disability and Equality continue to support the ongoing development and resourcing of “Core Funding”, which has given rise to a significant expansion of early learning and childcare places since the scheme was first introduced. Core Funding, which is in its third programme year, funds services based on the number of places available, whether or not they are filled. On 5 June Minister Foley announced the details of the new maximum fee cap for early learning and childcare services participating in Core Funding alongside record State funding of €390 million this year for the Scheme.

The expansion of capacity through capital funding is an initiative that the Government also supports. The Building Blocks Extension Grant Scheme will deliver additional capacity in the sector by supporting existing private or community early learning and childcare services to undertake physical extensions to existing premises, or for community services to purchase or construct new premises.

In May, Minister Foley announced €25 million in funding under the scheme to deliver 1,500 additional early learning and childcare places across the country. Forty-nine community and privately operated services have been shortlisted for funding, and these projects will deliver up to 1,500 additional full-time places for 1-3 year olds, with places expected to begin to come on stream later this year.

From a tax perspective, where a taxpayer carries on a trade consisting of the provision of childcare services, relief in the form of capital allowances is available for the cost of capital expenditure incurred on plant and machinery, such as equipment. I would note however that where a community childcare provider is a charity, the provider will not be subject to tax on their profits and the availability of capital allowances would not be a relevant issue.

To encourage employers to provide equipment for childcare facilities and fitness centres which are for the exclusive use of their employees, the Accelerated Capital Allowances (ACA) Scheme for Childcare Services and Fitness Centres is available. This scheme provides for 100% capital allowances in the first year in respect of expenditure incurred on qualifying equipment, and for an accelerated Industrial Buildings Annual Allowance on qualifying expenditure of 15% per annum for 6 years and 10% in year 7. The rationale for introducing this relief was to help tackle the cost and availability of childcare facilities, both of which had been cited as barriers to work.

Finally, I would also note that, subject to certain criteria, income of up to €15,000 per year may be exempt from Income tax and USC to individuals who provide childminding services in their own homes.