Budget 2026: Department of Housing, Local Government and Heritage announces record budget package of over €11 billion
- Published on: 7 October 2025
- Last updated on: 7 October 2025
- Housing capital investment reaches record €9+ billion
- 29% increase for Uisce Éireann to advance water infrastructure and facilitate housing development
- Enhanced funding allocation of €563m to support the provision of homeless services
- New Derelict Property Tax to be introduced administered by Revenue Commissioners
- Extension of the rent tax credit of €1,000 for 3 years
- Zero Per Cent Corporation Tax Rate for Cost Rental Units to encourage delivery of cost rental units
- Residential Tenancies Board (RTB) and other advocacy services will receive funding of €24 million
- €34m to support the Traveller Community, including for the delivery of new accommodation and repair & maintenance work
- Increase in funding for Planning to fund additional staff for An Coimisiún Pleanála and our planning authorities
- €670m to support local authorities, an increase of €80m on funding from the Local Government Fund
- Record €256 million boost for nature restoration and heritage, up 15% year-on-year, with National Parks and Wildlife Service over €100 million for first time
The Department of Housing, Local Government and Heritage has been allocated a record €11.275 billion in today’s budget, representing a 20% overall increase in funding for 2026.
The announcement was made by the Minister for Housing, Local Government and Heritage, James Browne TD, the Minister of State for Local Government and Planning, John Cummins TD, Minister of State for Nature, Heritage and Biodiversity, Christopher O’Sullivan TD and Minister of State for Older People and Housing Kieran O’Donnell TD.
Housing and Homelessness
Budget 2026 reinforces the Government’s commitment to boosting housing supply, unveiling a record-level funding package alongside tax measures to accelerate nationwide home construction to meet national targets.
Under this programme, the total exchequer funding available in 2026 is €7.21bn, comprising capital €5.19bn and current €2.02bn.
The capital provision of €5.19 billion will be complemented by investment through the Land Development Agency (LDA) and lending from the Housing Finance Agency (HFA), bringing the total capital funding for housing in 2026 to over €9 billion.
Minister Browne emphasised that a central focus of this budget had to ensure that individuals and families have access to a home whether to purchase or rent - at an affordable price. Minister Browne has also been clear that tackling homelessness and providing supports for those experiencing homelessness was a priority for Budget 2026.
The Minister for Housing, Local Government and Heritage, James Browne TD said:
“Without a doubt, homelessness and those in precarious living situations remain our most pressing challenge. It has to be our top priority. As part of today’s budget package, I am providing an enhanced funding allocation of €563.5 million up from €328m last year to support the provision of homeless services. This includes emergency accommodation, homelessness prevention initiatives, tenancy sustainment supports, and transitional accommodation for individuals experiencing homelessness. At the heart of our response has to be overall supply, and that is what I am determined to move the dial on.”
“To truly meet the scale of housing demand, we must deliver more homes across all tenures. In this budget, I have been determined to ensure this is a budget for housing.”
“We intend to further scale-up the delivery of social housing and build more social homes than we ever have. Therefore, an increased capital allocation of €2.9 billion has been provided to support local authorities and Approved Housing Bodies in the delivery of 10,200 newly built social homes.
“This funding will also ensure the continuation of the second-hand social housing acquisitions programme which will target those who are most vulnerable and in the most precarious housing situations.”
"The affordable purchase and cost rental schemes have already delivered long-term, secure housing at below market rates for thousands of individuals and families across the country. To build on this progress, an increased capital allocation of €1.2 billion has been committed to support the delivery of 7,500 affordable purchase and cost rental homes in 2026.”
“In 2026, we are committing over €570 million to support households in the private rented sector through the Housing Assistance Payment and the Rental Accommodation Scheme. This investment will enable more than 8,700 new households to access secure accommodation, while continuing support for over 61,000 existing tenancies.”
“In additional support to renters, we are extending the rent tax credit for a further three years.”
Budget 2026 tax measures relevant to housing delivery and apartment construction include:
- The VAT rate on the sale of completed apartments is reduced from 13.5% to 9% to address the “viability gap” in apartment construction and activate uncommenced planning permissions,
- Enhanced Corporation Tax Deductions on Construction Expenses to improve the financial viability of apartment construction, and
- Corporation Tax Exemption for Cost Rental Income to encourage delivery of cost rental units and increase viability of delivering cost rental units at affordable rents which are at least 25% below market rents.
Minister Browne said:
"These targeted tax measures represent an important step toward unlocking Ireland’s apartment pipeline and accelerating the delivery of affordable homes. They are designed to tackle the financial barriers that to been a challenge to apartment construction in recent years.”
Additional highlights of today’s budget announcement for housing include:
- €293 million is being provided in 2026 for the remediation of homes affected by defects, including pyrite, apartment defects and defective concrete blocks,
- €250 million will be available for lending under the Local Authority Home Loan which provides a route to home ownership for those who cannot secure the necessary commercial loan,
- €205 million has been allocated to Housing Infrastructure in 2026 to support the work of the Housing Activation Office in addressing infrastructure blockages and accelerate housing delivery and to support the delivery of affordable and social housing on state-owned lands,
- €140 million to support the retrofitting of 3,500 social homes to a Building Energy Rating of B2 in line with the Programme for Government commitment to retrofit 36,500 local authority homes by 2030,
- €130 million for grants to adapt the homes of older people and disabled people with a disability and for the supporting the provision of some 17,000 grant claims and continued implementation of the revised scheme recommendations of the review of the grants , while a further €28.5 million will support adaptation works to 1,800 existing social homes,
- A further €80 million in exchequer funding will be provided for the First Home Scheme which, with additional funding from participating banks, will support approvals for the purchase of 2,000 homes by eligible buyers,
- €55 million is provided for the Croí Cónaithe Cities Scheme to support the building of apartments for sale to owner-occupiers by activating planning permissions already in place for such homes,
- To support the rental sector, the Residential Tenancies Board (RTB) and other advocacy services will receive funding of €24 million. In addition, €10.5 million will be provided for local authority inspection activity in the rental sector to ensure compliance with rental standards,
- €34m to support the Traveller Community, including for the delivery of new accommodation and repair & maintenance work.
Speaking on the significant additional government funding allocated to the housing adaptation grant schemes, Minister O’Donnell said:
“As Minister of State with responsibility for housing for older people, my absolute priority is to enable individuals to continue living in their own homes and communities for as long as possible.
“This increased funding allocation in Budget 2026 of €130m for grants to adapt homes of older people and people with a disability is a further positive step towards advancing this. This represents a 30% increase on last year’s funding of €100m, and will support 17,000 applicants. A further €28.50m will support adaption works to 1,800 existing social homes.
“By increasing the funding available for these vital housing adaptation supports, we are working with local authorities to improve the lives and independence of older people and people with a disability.”
Initiatives in tackling vacancy and dereliction include:
- €165 million for the Vacant Property Refurbishment Grant which will support the refurbishment of vacant and derelict properties in cities, towns and rural areas, ensuring the efficient re-use of existing stock,
- Living City Initiative extended and expanded to support urban regeneration. The Living City Initiative has been extended to 2030, reinforcing the Government’s commitment to tackling dereliction and supporting regeneration in our cities and regional centres,
- A new Derelict Property Tax will be introduced to incentivise the reuse of vacant and neglected properties. This tax will be administered by the Revenue Commissioners, replacing the current Derelict Sites Levy which is managed by local authorities.
Uisce Éireann and Water Services
Minister Browne also announced a significant increase for Uisce Éireann, emphasising:
“Continued investment in public water services is essential to facilitating housing delivery. That is why we have increased Uisce Éireann’s funding by €496m, a 29% increase on Budget 2025, bringing the total allocation to €2.2 billion to accelerate the delivery of critical water infrastructure and support the development of new homes across the country.”
Overall, almost €2.5 billion has been secured for the delivery of water services – an increase of €612million on the 2025 allocation. This funding will support improved water supplies right across Ireland, including rural Ireland, and support a range of programmes delivering improved water quality in our rivers, lakes and marine area. This funding will support the delivery of objectives set out in the Programme for Government, including water protection programmes with key stakeholders and funding for the rural water sector.
In addition to Voted funding as previously announced under the National Development Plan, there will be an equity investment of €2 billion up to 2030 for Uisce Éireann to support the delivery of housing development plus an additional €2.5 billion for major projects such as the Water Supply Project and the Greater Dublin Drainage project.
Planning
More than €400m is being provided in 2026 for the Department’s planning programme.
The 2026 allocation will enable the Department to deliver a coordinated and responsive funding programme under the Urban Regeneration and Development Fund (URDF), supporting the revitalisation of towns and cities. With an allocation of €300 million—an increase of €114 million from 2025—the programme will advance sustainable urban development in line with national planning objectives.
This budget will also further support the implementation of the “Ministerial Action Plan on Planning Resources” and the introduction of the Planning and Development Act 2024.
Welcoming the increased allocation, Minister of State for Planning and Local Government John Cummins TD said:
“Resourcing the planning system is essential to delivering the ambitions of the new Planning and Development Act. A well-functioning, well-supported planning system is the foundation for sustainable development, timely decision-making, and the delivery of homes and infrastructure. We are continuing to fund additional staff for An Coimisiún Pleanála and our planning authorities – ensuring they are equipped to implement reforms and respond to growing demands.”
“I am also extremely pleased to note an increased allocation for the Urban Regeneration and Development Fund (URDF). Already, approximately €1.86 billion has been allocated under the URDF and the €300 million provided for 2026 will enable the Department to deliver a coordinated and responsive programme to support the regeneration and revitalisation of towns and cities nationwide."
Local Government
Funding of €801.7 million is being provided for local government and electoral reform in 2025. This represents an increase of €117.65m.
This will allow the Department to:
- Provide funding from the towards increased local authority pay/pensions costs arising from the implementation of national pay agreements,
- Equalisation payments will be made to local authorities with lower Local Property Tax (LPT) income, based on revised baselines. These baselines were updated in 2024 and further increased for 2026 to ensure councils benefit directly from higher LPT yields following the upcoming revaluation,
- Support important local government initiatives across the country, including reform and digitisation projects,
- Support the building of new fire service infrastructure, the renovation of older facilities, and the upgrading of essential fire-fighting equipment,
- Further support public awareness and local authority activity to maximise public engagement with the newly modernised electoral registration process, and
- Support initiatives aimed at improving gender balance and increasing diversity in local government decision-making processes.
Minister of State for Planning and Local Government John Cummins TD said:
“Local authorities are the frontline in delivering essential services that directly impact the daily lives of citizens. The Government is committed to ensuring they are fully supported in this role, including through targeted investment in reform and innovation.
“This includes dedicated funding for the Local Democracy Taskforce, which is advancing key reforms to strengthen the role of elected members, enhance local governance, and improve accountability and citizen engagement."
Nature, Heritage and Biodiversity
The Government has announced a record allocation of €256 million for nature, heritage, and biodiversity in Budget 2026—representing a 15% increase on the previous year. This historic investment underscores the Government’s continued commitment to conserving and managing Ireland’s natural and built heritage for the benefit of current and future generations. Within this figure the National Parks and Wildlife Service Budget allocation will increase by 20% bringing the core NPWS budget to above €100 million for the first time.
Welcoming the increased allocation, Minister of State Christopher O’Sullivan said:
“This is the largest budget ever allocated to nature and heritage in Ireland. It is a clear reflection of this Government’s commitment to safeguarding our environment and cultural legacy. The 15% increase will not only sustain but strengthen the protection and conservation of our heritage. The 20% increase in NPWS funding is significant and underscores the State’s commitment to nature restoration through our upcoming Nature Restoration Plan. It will enable large-scale habitat restoration, strengthen species recovery programmes and expand invasive species control. It also brings the core NPWS budget above €100 million for the first time—a symbolic milestone in sustained investment in nature."
Priorities funded by Budget 2026 include:
- Further implementation of Heritage Ireland 2030, Ireland’s national heritage plan, and a range of related Programme for Government commitments,
- A 10% increase for the National Monuments Service and National Built Heritage Service to continue to expand their work to record, conserve, and promote our archaeological and built heritage,
- Continue investment across the country in our archaeological and built heritage through the Community Monuments Fund, Built Heritage Investment Scheme, and Historic Structures Fund capital grant schemes,
- Further progress Ireland’s bid to have sites on the World Heritage tentative list placed on the UNESCO World Heritage site list,
- Increased funding for the Heritage Council to continue to expand its work in supporting community heritage projects and capacity building across the heritage sector, including in relation to the National Biodiversity Data Centre.
Ends