Irish Revenue issues eBrief 013/26 and TDM Part 04-06-27 outlining enhanced corporation tax relief for qualifying apartment construction.
Irish Revenue has published eBrief No. 013/26 on 16 January 2026, providing updated guidance on the enhanced deduction for qualifying construction expenses introduced under the Finance Act 2025.
A new Tax and Duty Manual (TDM) Part 04-06-27 – Enhanced deduction for eligible construction expenditure has also been released. The TDM outlines the corporation tax relief available under section 81E of the Taxes Consolidation Act 1997 (TCA 1997). This provision, introduced by section 42 of the Finance Act 2025, allows an enhanced deduction for eligible construction expenditure incurred in the construction of a completed development, specifically qualifying apartment blocks meeting certain conditions.
Overview of the enhanced deduction
The enhanced deduction enables companies to claim additional relief when calculating certain trading profits for eligible construction expenditure. A completed development is defined as a qualifying apartment block that meets the following criteria:
- The building has at least 10 apartments.
- It is either:
- A newly constructed building, or
- A building that has undergone a material change as part of a qualifying refurbishment.
Calculating the enhanced deduction
The enhanced deduction is calculated in two steps:
- Compute the deduction under subsection (5) of section 81E TCA 1997
The deduction is calculated using the formula: A × 25%, where:
- A is the total eligible expenditure incurred by the company on the completed development, for which the company is entitled to a corporation tax deduction under Schedule D Case I in computing the profits of a relevant development property trade or qualifying trade.
This calculation considers all eligible expenditure incurred up to the relevant date that qualifies for corporation tax relief.
- Apply the limit under subsection (6) of section 81E TCA 1997
The amount calculated under subsection (5) is subject to a maximum limit. The limit is determined by the formula: B × C × D, where:
- B is the number of apartments in the completed development,
- C is EUR 50,000, and
- D is the percentage of the development beneficially owned by the relevant person, or, in the case of a relevant contractor, deemed to be beneficially owned, at the date the certificate of compliance on completion is lodged with the local authority.
