Recent news about Ireland’s Budget 2026 has brought a wave of optimism to the housing market, particularly for apartment developments. According to Michael Stanley, CEO of Cairn Homes, a combination of new fiscal measures and updated building guidelines could be the “tipping point” needed to make many apartment schemes viable again. This is welcome news for prospective apartment buyers who have faced a market constrained by high costs and low supply.
For years, the high cost of construction has made building new apartments a challenge for developers. This has resulted in fewer new homes being built, pushing prices up for buyers. However, the latest government initiatives aim to tackle this issue directly. By making it more financially feasible for developers to build, the government hopes to increase the supply of new apartments, which could lead to more choice and potentially more stable pricing for buyers.
This blog post will explore what these changes mean for you as a potential apartment buyer. We’ll break down the key measures from Budget 2026, explain how they impact the housing market, and discuss the unique aspects of purchasing an apartment that you need to be aware of. Understanding these developments is the first step toward navigating the property market with confidence.
Budget 2026: A Turning Point for Apartment Viability
The core of the recent announcement is that new government measures are set to make building apartments more financially sustainable for developers. Michael Stanley of Cairn Homes stated that the combined effect of the budget measures and new building guidelines is likely
“worth about €70,000-€80,000 per apartment.”
This significant reduction in costs is expected to make a “majority” of planned apartment schemes viable, which previously might have been stalled or cancelled.
What are the key measures?
Several initiatives were announced by the Minister for Finance, Paschal Donohoe, to stimulate apartment construction:
- VAT Reduction: The VAT rate on the sale of completed apartments will be cut from 13.5% to 9%. This directly reduces the final cost for developers, making projects more profitable.
- Enhanced Tax Deductions: Developers can now claim enhanced corporation tax deductions for certain apartment construction projects.
- Support for Conversions: New measures will support the conversion of “over the shop” premises and other non-residential buildings into apartments.
These changes are designed to address a critical issue highlighted in a Department of Finance paper last year. It noted that the average cost to develop a two-bed apartment was between €450,000 and €550,000, while median sale prices were significantly lower, making it unprofitable for developers to build for owner-occupiers.
Why This Matters to You as a Buyer
An increase in the viability of apartment construction has several direct and indirect benefits for those looking to buy.
More Choice and Availability
The most immediate impact of these measures should be an increase in the number of new apartments being built. For years, apartment completions have lagged, with a 24% drop last year to just 8,763 units. To meet housing targets, experts say that apartments need to make up a much larger portion of new homes. As more schemes become viable, buyers will have a wider range of properties to choose from in various locations.
Potential for Price Stabilisation
While these measures don’t guarantee lower prices, an increased supply of apartments can help to stabilise the market. When supply is low and demand is high, prices naturally rise. By boosting the number of available units, the market can become more balanced, potentially easing the intense price competition that has defined the property market in recent years. This could make it easier for first-time buyers and others to get onto the property ladder.
Improved Quality and Modern Living
New apartment developments are built to the latest standards, often featuring better energy efficiency, modern amenities, and improved design. As developers are incentivised to build again, buyers can look forward to high-quality, contemporary homes that are more comfortable and cost-effective to run in the long term.
The Unique Aspects of Buying an Apartment
While the budget news is positive, it’s important to remember that buying an apartment is different from buying a house. Apartments are part of a larger, managed development, which comes with its own set of legal and financial considerations. Understanding these is crucial for a smooth purchase.
Understanding the Owners’ Management Company (OMC)
When you buy an apartment, you become a member of the Owners’ Management Company (OMC). The OMC is the legal entity responsible for managing and maintaining the shared areas of the development, such as hallways, lifts, car parks, and green spaces. All owners are part of the OMC, which is usually run by a board of directors elected from among the owners.
Before buying, it’s essential to investigate the health of the OMC. Is it well-run? Are meetings held regularly? A poorly managed OMC can lead to problems with the upkeep of the building and potential legal disputes.
Service Charges and Sinking Funds
To fund the maintenance of the development, all owners must pay an annual service charge. This fee covers costs like insurance, cleaning, landscaping, and security. Your solicitor should obtain the OMC’s accounts so you can see how this money is being spent.
A portion of the service charge should also be allocated to a sinking fund. This is a reserve fund set aside for major, long-term repairs, such as replacing the roof or overhauling the lifts. The Multi-Unit Developments Act 2011 requires all OMCs to maintain a sinking fund. A healthy sinking fund is a sign of a well-managed development and protects owners from sudden, large levies for unexpected repairs.
The Conveyancing Process for Apartments
The legal process for buying an apartment, known as conveyancing, is more complex than for a house. Your solicitor will need to carry out extra checks related to the OMC, including:
- Reviewing the OMC’s financial accounts.
- Checking that the service charges and sinking fund contributions are up to date for the property you are buying.
- Ensuring the development complies with all planning and building regulations.
- Confirming there are no unresolved legal disputes involving the OMC.
Because of these additional steps, it’s vital to work with a solicitor who has specific experience in apartment conveyancing.
Your Next Steps on the Property Ladder
The recent announcements in Budget 2026 signal a positive shift for the apartment market, promising more availability and choice for buyers. As more developments become viable, your dream of owning a modern, well-located apartment may be closer than you think.
However, the path to ownership requires careful navigation of the unique legal landscape of apartment purchasing. Understanding the role of the Owners’ Management Company, service charges, and the importance of a healthy sinking fund is essential to protect your investment.
At HOMS Assist, our experienced property team specialises in residential conveyancing, including the specific complexities of buying an apartment. We are here to provide clear, expert legal advice to guide you through every stage of the process with confidence.
If you are considering buying an apartment and want to ensure a smooth and secure transaction, contact our property team today for professional legal guidance.
