Ireland’s Finance Act 2025 has been enacted, delivering a wide-ranging package of tax measures that include enhanced corporation tax reliefs for construction and the creative industries, an increased R&D credit, extensions to key income tax and VAT reliefs, higher CGT entrepreneur limits, and targeted changes to stamp duty, housing, energy and retirement savings.
Ireland has enacted the Finance Act 2025, following its approval by parliament on 23 December 2025, delivering a wide-ranging package of tax measures that include enhanced corporation tax reliefs for construction and the creative industries, an increased R&D credit, extensions to key income tax and VAT reliefs, higher CGT entrepreneur limits, and targeted changes to stamp duty, housing, energy and retirement savings.
The key provisions of the legislation are outlined below:
Corporation Tax
New reliefs and enhanced deductions are introduced for construction and the creative industries.
Enhanced deduction for construction:
A new Section 81E introduces an enhanced corporation tax relief for qualifying apartment construction, providing an enhanced deduction of 125% on eligible expenditure for “completed developments” specifically apartment blocks with at least 10 units, with the additional deduction capped at EUR 50,000 per unit.
Film relief (Visual Effects)
Section 481 is amended to allow for an “enhanced credit amount for visual effects”. Where a film is a visual effects project, the tax credit may be calculated at 40% (instead of 32%) for the first EUR 10,000,000 of qualifying expenditure.
Digital games relief:
Section 481A is updated to allow for a “post-release extension of an interim certificate” for digital games.
Research and development (R&D)
The Finance Act 2025 enhances Ireland’s R&D tax credit to further incentivise innovation. The credit rate is increased from 30% to 35% for certain accounting periods. The first-year payment threshold is also raised from EUR 75,000 to EUR 87,500, providing additional upfront support for qualifying businesses. To simplify administration, the Act introduces a measure allowing 100% of an R&D employee’s emoluments to be claimed as qualifying costs, provided at least 95% of their time is dedicated to eligible R&D activities.
Income tax amendments
The Act extends several key tax credits and introduces new administrative requirements for donations and retirement systems.
Rent tax credit
Section 473B is extended to include the years of assessment 2022 to 2028 inclusive.
Mortgage interest tax relief
Section 473C is amended to define new qualifying periods through 31 December 2026. The “upper limit” for relief is set at EUR 6,250 for 2023–2025, and reduced to EUR 3,125 for 2026.
Donations to sports bodies
New requirements are introduced for donations to approved sports bodies and National Governing Bodies, including the assignment of unique receipt numbers and approved project numbers.
Extension of reliefs
Exemptions for profits from micro-generation of electricity and the production/repair of certain musical instruments are both extended to 31 December 2028.
Automatic enrolment retirement savings
A new Chapter 2E is inserted to handle the Automatic Enrolment Retirement Savings System. Employer contributions are deductible as an expense, and the State contribution is exempt from income tax and USC.
Capital gains tax
Revised entrepreneur relief
For disposals on or after January 2026, the lifetime limit for the lower CGT rate (10%) is increased from EUR 1,000,000 to EUR 1,500,000.
Farm restructuring relief
The relevant period for this relief is extended to 31 December 2029.
Value-Added Tax (VAT)
Energy rates
The reduced rate for electricity and gas is extended to 31 December 2030.
Social policy housing
A reduced rate of 9% is introduced for the supply of apartments in apartment blocks used for residential purposes as part of a social policy.
Flat-rate farmers
The flat-rate addition for farmers is reduced from 5.1% to 4.5% effective 1 January 2026.
Stamp duties
High-value residential property
For conveyances of residential property, the Act introduces a new tiered rate: 1% on the first EUR 1,000,000, 2% on the next EUR 500,000, and 6% on the balance above EUR 1,500,000.
Residential development repayment
The period for commencing construction to qualify for a stamp duty repayment is extended to 36 months for large-scale residential developments (30 months otherwise). The scheme itself is extended to 31 December 2030.
