Budget 2027: What It Means For Real Estate, Infrastructure And Development

From a real estate, infrastructure and development perspective, Budget 2027 is notable as much for what it does not contain as for what it does. Unlike previous budgets, it does not introduce any major headline tax measures and in particular, does not include the significant housing-viability measures introduced in Budget 2026. Instead, the emphasis is on delivery, with increased capital investment and measures aimed at improving efficiency and accelerating development timelines.

Key takeaways

• Increased capital investment: Capital expenditure on infrastructure will increase to €20.3 billion in 2027, an increase of €1.1 billion on 2026 levels. This investment is intended to support critical infrastructure, including water services, electricity networks, biomethane projects and district heating systems.
• Investment Undertakings Tax (IUT): The tax rate applying to Irish investment undertakings, including ICAVs, will be reduced from 38% to 35% with effect from 1 January 2027.
• Residential Zoned Land Tax (RZLT): Landowners will have a further opportunity in 2027 to seek rezoning of land currently within the scope of RZLT, potentially removing such land from the tax’s application.
• Derelict Property Tax: A new Derelict Property Tax will be introduced through the Finance Bill. The tax will apply from 2028 at a rate of 7% of market value.
• Capital Gains Tax (CGT): The standard CGT rate will be reduced by 2 percent, from 33% to 31%. Importantly, this reduction will not apply to gains arising on disposals of development land.

In more detail

Corporate taxes and administration

For corporate entities generally, a reduction in the rate of tax applying to Irish investment undertakings (including ICAVs) from 38% to 35% from 1 January 2027 will be seen as positive, as will proposals to simplify the administrative burden and increase flexibility for businesses in complying with their tax obligations.

Investment and removing infrastructure bottlenecks

Capital investment in infrastructure in 2027 is set at €20.3 billion to support both housing and commercial development. As part of the policy to accelerate infrastructure development generally, €119 million is allocated to planning authorities in 2027, which includes €66 million to support planning-system capacity. Housing funding will total €9.4 billion, including €3 billion for social housing delivery, 11,250 new-build social homes, €225 million for the Housing Infrastructure Investment Fund, more than €1 billion for the Starter Homes Programme and €350 million for urban regeneration. The Department of Transport will receive €5.5 billion in 2027, including €4.2 billion for DART+, BusConnects, Cork commuter rail and major roads. A further €6 billion from 2027 to 2030 will support MetroLink, which is expected to enable up to 120,000 additional homes. Uisce Éireann will receive €2.3 billion, including €1.5 billion in capital funding for water resilience, connections and wastewater treatment across more than 400 projects. This is all in the context of a total of €275.4 billion allocated to infrastructure over the ten years of the current National Development Plan.

Capital gains tax

There is a 2% reduction in the standard rate of Capital Gains Tax (CGT) from 33% to 31%. The reduced rate will apply to disposals attracting the standard rate of CGT made on or after 7 October 2026. Revenue have already updated their Tax and Duty Manual Part 02-03-01A (PDF, 1,610 KB) to reflect this. An important point for developers is that chargeable gains on disposals of development land do not attract the standard rate and continue to be chargeable to CGT at a rate of 33%.

Housing and land

• Owners and developers of lands subject to RZLT will have a further opportunity in 2027 to seek to have their land rezoned to reflect genuine economic activity carried out on the lands. If successful in the rezoning application, this would allow a claim for an exemption from the 2027 RZLT liability affecting those lands. Further details and timelines for this will be contained in the Finance Bill.
• Help to Buy: the maximum tax rebate allowed under the Help to Buy Scheme (and available to be applied by eligible first-time homeowners as a deposit for a new-build home) is increased from €30,000 to €35,000 with effect from 7 October 2026, supporting both affordability and first-time buyer demand in the market.
• For small landlords and renters, increases in the rent-a-room reliefscheme (from €14,000 to €16,000 per annum) and rent tax credit (by €150 per person) will also be welcome.

Derelict property tax

Work will commence in 2027 to bring into effect a new Derelict Property Tax first announced in Budget 2026, with DPT of 7% of market value applying to all property in scope. The tax will be collected by Revenue based on registers to be put in place by 1 September 2027 by local authorities. The first pay and file period for taxpayers will be from 1 March 2028 to 23 June 2028. Again, further details and timelines for this will be contained in the Finance Bill.

Energy

Addressing costs for homes and businesses gets sharp focus in Budget 2027. Out of €1.3 billion allocated to the Department of Climate, Energy and the Environment, €950 million is for an Energy Transformation programme, of which a record capital allocation of over €650 million is to support SEAI home energy upgrade schemes.

The Government had already approved €3.5 billion in Exchequer funding for the electricity grid for 2026–2030 as part of the National Development Plan, and Budget 2027 reiterated that commitment. In addition to the allocation to planning authorities mentioned above, the policy of accelerating infrastructure development can also be seen in an allocation of over €10 million to the Maritime Area Regulatory Authority and additional support for the Environmental Protection Agency. €15 million is also allocated to Geological Survey Ireland for its Tellus (on-shore) and INFOMAR (off-shore) programmes to support data gathering and mapping.

In the biomethane sector, a €200 million capital grant scheme is confirmed to open in the coming days. For district heating, in addition to recent announcements of funding for nine new projects, a further €50–100 million has been earmarked from the Infrastructure, Climate and Nature Fund, the scheme for which is to open in Q1 2027.

Looking forward

Most of the measures announced in Budget 2027 will take further shape in the Finance Bill and we’ll be watching this closely. For housing and infrastructure delivery, 2027 will test whether the tax measures of previous budgets combined with increased capital investment and momentum-generating interventions of the Accelerating Infrastructure Taskforce and the Critical Infrastructure Act will deliver results at the pace and scale required.