A new 9% VAT rate on the construction of apartment blocks takes effect today, 26 November, and is expected to quicken the delivery of homes over the next five years, Fine Gael Senator PJ Murphy has said.

He argued that apartments are essential to expanding housing supply and that the cut provides the financial impetus needed to advance projects. The change follows a Government financial resolution to implement the measure set out in Budget 2026.

Senator Murphy explained: "The VAT on construction of new apartment blocks will be set at 9% from tomorrow and will be set at that rate for the next 5 years, until December 2030. This will allow it to cover the life cycle of a building project, which can stretch over a number of years. It will also incentivise builders to move on new developments which may already have planning permission, but up to now, weren't financially viable.

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"Our increasing population and evolving demographic means that a greater diversity of choice must be offered alongside adequate supply. More apartments will be part of that offering.

"These new apartments will also qualify for the 'Help to Buy' scheme, which should give a greater choice to those who want to own their own home.

"Government has committed to delivering 300,000 new homes by 2030. We need to acknowledge that apartments will make up a considerable share of these new homes and the 9% VAT rate should address the viability gap which currently exists between building houses and building apartments," Senator Murphy concluded.