Finance Minister Paschal Donohoe has ruled out reintroducing tax breaks for property developers, saying such measures have harmed the economy in the past, writes Craig Hughes.

Donohoe and his Fine Gael colleagues were “blindsided” by comments from Taoiseach and Fianna Fáil leader Micheál Martin speculating on the return of tax breaks and an end to Rent Pressure Zones (RPZs), BusinessPlus.ie understands.

“It went far and above what is in the agreed Programme for Government,” a source said.

While Fianna Fáil retains the Housing portfolio, tax measures are a matter for the Department of Finance, and Minister Donohoe firmly ruled out relief for developers yesterday.

“We should not bring in and reintroduce the reliefs that proved so costly and did such harm a number of years ago,” the minister said during a visit to Brussels.

“We need instead to be delivering policy stability, and we need to have a stable tax and policy framework within which those who are building more homes can operate – and reintroduction of those reliefs is not a way in which we will do it.”

Donohoe said that, in particular, Section 23 relief, which allowed companies or individuals to get a tax break on certain rental properties, proved to be “very, very costly”, adding: “From a taxation perspective, we have many plans in place that are seen to work and are seen to play a positive role.

“Help to Buy, the Shared Home Equity Scheme, the work that we are doing under zoned land tax are all very positive interventions that I believe play a good role in allowing more homes to be built.”

While divisions on housing policy measures are emerging between the two Government parties, a number of measures were agreed at a Cabinet committee on housing last night, including plans to fast-track Compulsory Purchase Order (CPO) laws and to rezone land for housing.

A new Government roadmap with the aim of building 50,000 new homes per year will be published later in 2025, but the committee agreed on several immediate measures last night.

They agreed to prioritise the delivery of utilities such as water and electricity to service sites for housing development .

This has been cited by the building sector as a barrier to faster and more significant development.

Also, a Strategic Housing Activation Office is to be established to unblock infrastructure delays while the committee also agreed to the quick implementation of the Planning and Development Bill.

There was also an agreement to accelerate the delivery of social and starter housing and to progress the Short Term Letting and Tourism Bill, which it is hoped will free up thousands of homes currently being used as short-term lets, as well as commencement of a review of Rent Pressure Zones.

The Taoiseach Micheal Martin and Tánaiste Simon Harris said “housing delivery is the number-one priority for this Government”

Donohoe, who did not attend Cabinet as he was attending a meeting of the Eurogroup of finance ministers in Brussels, said there are “alternative ways” to meet the goal of increased housing delivery other than tax breaks for developers, adding that there were many possible policy changes that could be considered.

In a joint statement, a spokesman for the Taoiseach and Tánaiste Simon Harris said “housing delivery is the number-one priority for this Government” and that an updated Housing for All will be required to meet targets.

Photo: Paschal Donohoe, president of Eurogroup. Photographer: Simon Wohlfahrt/Bloomberg via Getty Images