Construction, infrastructure delays will hinder Irish economic growth, warns Deloitte
Delays to the construction of housing and upgrades of key infrastructure will hinder Irish economic growth and create more costly problems in the future, consultancy firm Deloitte has warned.In a pre-budget submission, the Big Four firm said housing and infrastructure should be at the top of the Government’s spending priorities as it prepares to deliver Budget 2027 later this year. Policies, including tax incentives, should be “geared towards accelerating the provision of housing”, Deloitte said. “Ireland is currently experiencing a critical shortage of housing alongside ageing water, electricity, and transport infrastructure,” the firm added.READ MORELearning from the 1970s oil shockI invested in Datalex shares about 20 years ago. Are they worth anything now?Investing in cryptocurrency seems ‘like a more upmarket approach to gambling’Deloitte warns the Government on housing delays“Delays in these areas hinder economic growth and the ability to attract and retain skilled workers.”Deloitte warns that the annual building rate will have to increase “substantially” if the Coalition is to meet its commitment in the programme for government to deliver 300,000 new homes by 2030. House completions in the Republic rose by 20.4 per cent last year to 36,284 units, according to Central Statistics Office data, in advance of the Central Bank of Ireland’s and the Economic and Social Research Institute’s expectations.However, the Department of Housing had set a target of delivering 41,000 homes in 2025 as part of the broader aim of 300,000 units being built by the end of the decade.Earlier this month, the Banking and Payments Federation of Ireland published figures highlighting a 75 per cent decline in new housing commencements last year. The lobby group’s chief economist, Ali Uğur, said the “steep decline” during 2025 presents “risks to future supply” beyond 2026 in the absence of a “significant rebound” in scheme and apartment commencements in 2026.In its budget submission, Deloitte said that despite the introduction of new incentives and reliefs in Budget 2026 – including the reduction of VAT on the sale of new apartments from 13.5 per cent to 9 per cent – the Republic continues to face housing delivery “challenges”. It recommended tax incentives to accelerate the remediation of brownfield sites for residential use, including relief from Capital Gains Tax (CGT) to incentivise the current owners of the sites to relocate. Among other things, Deloitte said the Coalition should also look to enhance stamp duty relief to provide full refunds for apartment construction. Additionally, “specific actions should include accelerating housing delivery by removing planning barriers”, the firm said, and “modernising water and energy infrastructure by completing critical upgrades”.Are Government's fuel measures betting on a quick resolution to the conflict in Iran?Aside from housing, Deloitte also reiterated its call to reduce the headline 33 per cent CGT rate to 20 per cent. The firm said that with global markets “volatile” and multinational companies being “highly mobile”, tax changes are required to encourage indigenous businesses to reinvest and “retain wealth domestically”.CGT receipts are yet to return to their 2006 peak of €3.1 billion, suggesting that the current 33 per cent rate could be suppressing realisations and limiting revenue potential. Deloitte said it welcomes Taoiseach Micheál Martin’s recent statement that the 33 per cent rate is “too high”. “Encouraging investment from within Ireland is crucial for long-term growth and stability,” said Deloitte Ireland’s head of tax and legal, Daryl Hanberry. “Supporting local entrepreneurs, family businesses, and SMEs can drive job creation, innovation, and wealth retention. This is why we continue to call for a reduction in the CGT rate to 20 per cent to unlock capital, encourage business succession, and boost reinvestment.”
