Self-builders will benefit from a reduction in VAT on heat pumps and, as already signalled, a further extension to the Help to Buy scheme.
In this article we cover:
- What Budget 2025 means for self-builders
- What self-builders will get
- Changes to planning: zoning
- More resources for building control
Self-builders weren’t left out in the cold by the so-called ‘giveaway Budget’ of 2025, but not far from it.
As already signalled in April 2024, Budget 2025 makes provisions to extend the Help to Buy scheme to the end of 2029. The Help to Buy scheme gives self-builders tax back to help fund their mortgage.
The VAT on heat pumps, meanwhile, is being reduced from 13.5 per cent to 9 per cent. In light of inflation, the actual savings to self-builders remain unclear.
The Sustainable Energy Authority of Ireland grants are also getting a funding boost, for home energy upgrades, in particular for the Warmer Homes Scheme. Grant amounts aren’t being increased but more funding could mean reducing the backlog.
Still, the government has decided not to extend one of its main supports to self-builders. Which is the development levy waiver that is currently saving house builders tens of thousands of euros. That measure will lapse as scheduled, at the end of the year.
Planning and zoning changes
The Department of Housing signalled the new planning bill will bring more resources to local authorities, including an increase in the number of building control inspectors. Currently, self-build sites are rarely inspected by local authorities.
The Building Standards Regulatory Authority will establish a board this quarter (2024) on an interim basis, said Minister O’Brien, in light of the “legacy issues” such as defective concrete blocks.
Meanwhile, landowners who don’t make use of favourable zoning to build a house are subject to the Residential Zoned Land Tax, which according to Minister for Finance Jack Chambers “is an important lever to activate the building of houses on appropriate sites which have been identified by local authorities across the country”.
Landowners who “carry out genuine economic activity on their land” will get an exemption in 2025 if they seek to have their land rezoned to reflect the activity they carry out on their land. In other words, rezone the land so it is no longer zoned as housing.
The Department for Housing will issue Section 28 guidelines to the local authorities; Minister O’Brien said at his Budget 2025 press conference: “Effectively if someone has an existing economic use for the land – farming is the obvious example – and they want to continue to do that and they do not want that land developed, they will be given the opportunity to seek an appropriate zoning on that. The local authorities as their reserved function will decide.”
To help stimulate housing development, the department is also investing in water infrastructure. Minister for Housing said: “In addition to the €1.7bn for Uisce Éireann next year in 2025, we have secured an equity investment of €1 billion for Uisce Éireann to support the delivery of their Capital Investment Plan for 2025-2029. This continued investment in public water services capital infrastructure will be vital to support future housing delivery.”
