Pearse Doherty (Donegal, Sinn Fein)
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313. To ask the Minister for Finance all qualifying cost for the higher rate deduction regarding the enhanced corporation tax deduction for apartment construction costs announced in budget 2026, in tabular form; and if he will make a statement on the matter. [57254/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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In Budget 2026 I announced an enhanced corporation tax deduction for certain costs incurred on the construction of apartment blocks, and for the conversion of non-residential buildings into apartment blocks, to improve the viability of such developments. The measure will be legislated for in the Finance Bill and will be available for projects for which a first Commencement Notice is submitted between 8 October 2025 and 31 December 2030. The enhanced deduction is designed to address the viability gap that currently exists between the cost of developing apartments and viable market prices, by reducing corporation tax payable on profits. Full details of the measure are set out in Finance Bill 2025.

The enhanced deduction is available to companies carrying out a property development trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale. The measure allows a 125% deduction for expenditure that is deductible in computing profits from a property development trade for corporation tax purposes, subject to certain conditions and to a maximum enhanced deduction of €50,000 per apartment in a qualifying apartment block.

To qualify, the property development company must beneficially own the apartment block on the date that the certificate of compliance on completion is lodged with the relevant local authority. Where more than one property development company beneficially owns the apartment block at this time, the legislation will govern apportionment of the €50,000 cap. If the property development company is not the beneficial owner of the apartment block at the time of the lodging of the certificate of compliance on completion, it will not be entitled to any enhanced deduction.

The enhanced deduction is only available in respect of expenditure which falls within the definition of “eligible expenditure”. Eligible expenditure, in respect of a completed apartment block development, means expenditure incurred by a property development company, up to the date on which the apartment block is completed and a certificate of compliance of completion is lodged with the relevant local authority.

The provision is intended to apply to the “hard costs” associated with the construction or refurbishment of completed apartment block developments which includes, for example:

• sub-structure, structure, internal sub-division, external enclosure, finishes and fittings, and associated services;
• basement car park;
• site development costs; and
• qualifying refurbishment costs, such as, reconstruction, restoration, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, where such a refurbishment results in a material change whereby such property is suitable for use as a dwelling having previously not been suitable, such as the conversion of offices or retail spaces into apartments.

• financing costs;
• insurance costs;
• professional and legal fees;
• sales and marketing costs;
• taxes, duties, levies or charges;
• land acquisition costs;
• levies, fees, charges or contributions in respect of the completed development, such as, but not limited to, development contributions, utility connection costs, environmental levies, planning application fees, building control fees, and building energy rating fees.