The Chartered Institute of Building (CIOB) has responded to Ireland's Budget 2026, highlighting its implications for the construction sector and the built environment.

Budget 2026 outlines a €9.4 billion package, including €7.9 billion in new spending and €1.5 billion in tax reductions. Rising wages in the construction sector, driven by workforce constraints, underline the importance of measured fiscal policy to avoid overheating the economy.

Joseph Kilroy, Policy and Public Affairs Manager for CIOB in Ireland, said: "Budget 2026 reflects a welcome commitment to sustained investment in Ireland's built environment and critical infrastructure. The scale of capital spending announced – from housing activation and water infrastructure to transport connectivity – is vital to tackling the structural challenges of affordability, capacity and regional imbalance that continue to shape our housing and construction markets.

"However, while we welcome measures such as the reduced VAT rate on new apartments, we are concerned that the opportunity to align Ireland's tax system with its climate ambitions has once again been missed. Current VAT rules still treat demolition and rebuild on par with renovation and retrofit, which runs counter to our national goals on decarbonisation and the circular economy. Reform in this area is essential if we are to foster a culture of reuse and retrofit rather than demolish and rebuild.

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"The CIOB also urges the Government to shift focus from demand-side measures like Help to Buy towards upstream interventions that address dysfunction in the land market. Supporting land activation and early-stage development would have a far greater long-term impact on housing supply and affordability.

"Overall, this Budget demonstrates that Ireland is serious about long-term planning and capital investment. The challenge now is to ensure spending decisions not only drive economic growth, but also deliver sustainable, high-quality places for people to live and work."

Infrastructure and Housing

CIOB welcomes the new Housing Activation Infrastructure Fund, with €205 million to unlock housing development. Water and wastewater projects receive €1.4 billion for essential capacity and resilience. Transport infrastructure funding totals €4.7 billion, including DART+ and regional connectivity projects.

The National Development Plan continues to provide the construction sector with certainty and a long-term pipeline, with €275 billion allocated across energy, water, housing, and transport infrastructure.

The VAT on new apartment construction is reduced to 9 per cent until 2030, but CIOB stresses reform is needed to incentivise sustainable building practices. The Department of Housing receives €11.3 billion, including €2.9 billion for new social homes, €140 million for social housing retrofits, and €130 million for retrofitting older persons' homes.

Sustainability and Skills

€724 million is allocated for energy transformation, including €558 million for home retrofit schemes. Budget 2026 prioritises deep retrofits for public social housing and vulnerable groups.

The R&D Tax Credit has increased from 30 percent to 35 percent, supporting construction investment in sustainable materials, energy-efficient designs, and smart building technologies. Expanded eligibility could strengthen industry competitiveness and modernisation.

Overall, CIOB sees Budget 2026 as a significant step for Ireland's construction sector, providing capital investment, housing measures, and sustainability initiatives that support long-term growth and high-quality places to live and work.