Companies
The enhanced deduction for building apartments: 125% of construction costs
Last updated 16 October 2026
Developers building blocks of 10 or more apartments can deduct an extra 25% of building costs, capped at €50,000 an apartment. For projects started to 2030.
Finance Act 2025 introduced section 81E of the Taxes Consolidation Act, a corporation tax relief to encourage apartment building. A company that develops a qualifying apartment block can deduct an extra 25% of its eligible construction costs (the costs that count). That is on top of the normal deduction for those costs: 125% in total.
Which developments qualify
- a multi-storey building made up mainly of at least 10 apartments, either newly built or converted from other use through a qualifying refurbishment
- planning permission that includes at least 10 new apartments
- a commencement notice lodged with the local authority between 8 October 2025 and 31 December 2030
- all apartments ready to live in, and a certificate of compliance on completion lodged, before the planning permission expires
Mixed-use buildings can qualify if they are principally apartments, for example with a shop, gym or crèche on the ground floor.
Who can claim
A property developer trading in the construction of buildings for sale, which owns the completed development when the completion certificate is lodged. Where the owner can't claim, such as an approved housing body, it can make a declaration allowing the building contractor to claim instead.
How much
The extra deduction is 25% of eligible expenditure, capped at €50,000 for each apartment, scaled to the share of the development the claimant owns. For a 40-apartment block with €14,000,000 of eligible construction costs:
| 25% of eligible costs | €3,500,000.00 |
| Cap: 40 apartments × €50,000 | €2,000,000.00 |
| Enhanced deduction (the lower) | €2,000,000.00 |
| Corporation tax saved at 12.5% | €250,000.00 |
The cap means the benefit is at most €6,250 per apartment.
What counts as eligible expenditure
Construction operations on the development, including demolition and conversion work. It excludes plant and machinery and other capital spending, land, finance and insurance costs, and professional and legal fees. It also excludes sales and marketing, taxes, development contributions, connection charges and planning or building control fees.
Claiming
The claim is made on the corporation tax return for the accounting period in which the certificate of compliance on completion is lodged. It must be made within 12 months of the end of that period. The company gives the eligible expenditure and number of apartments.
Work it out
Sources
- Revenue: Corporation Tax: basis of charge (12.5% trading, 25% non-trading and excepted trades) (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.