What does Ireland’s 2025 Budget mean for construction?

The budget will see a notable €7.8 billion (US$8.5 billion) allocation to the Department of Housing (Photo: AdobeStock)

The budget, which includes €6.9 billion (US$7.5 billion) in spending and €1.4 billion in taxation measures, also features a €2.2 billion (US$2.4 billion) cost-of-living package designed to support individuals and families.

Significant investments have been earmarked for infrastructure development, said to be a priority for Finance Minister Jack Chambers, who emphasised the importance of sustainable urban growth and regional connectivity. 

The budget will see a notable €7.8 billion (US$8.5 billion) allocation to the Department of Housing. This includes €2 billion (US$2.1 billion) dedicated to constructing 10,000 social homes, a move expected to alleviate pressure in the country’s overstretched housing market. However, the extension of the Help to Buy scheme to 2029 has stirred debate, as some experts suggest that demand-side policies could contribute to rising house prices.

Sustainability and climate initiatives

The budget also outlines a €3 billion (US$3.2 billion) climate transition fund set aside for projects spanning 2026 to 2030, reflecting the government’s commitment to environmental sustainability.

Despite these provisions, the Chartered Institute of Building (CIOB) says they “are disappointed at the level of funding made available for retrofit”.

The CIOB says that the Climate Action Plan envisages this scaling up to over 50,000 annually from 2024, to achieve a target of retrofitting 500,000 buildings to a B rating or above by 2030. The company adds that this is triple the amount of B2 retrofits achieved in 2023. While half of the €951 million (US$1 billion) raised by the carbon tax is a welcome boost, it is simply not sufficient to deliver the scale of retrofit required. 

Education and workforce development

A review of the research and development (R&D) tax credit will take place (Photo: AdobeStock)

Addressing workforce challenges, the Budget 2025 allocates €1.5 billion (US$1.6 billion) over six years from the National Training Fund to support skills development and higher education.

Moreover, a review of the research and development (R&D) tax credit will take place, with an interim increase of the credit threshold from €50,000 to €75,000. The CIOB welcomes this announcement and says that this is a “step in the right direction on this front”. 

Joseph Kilroy, CIOB’s Policy and Public Affairs Manager Ireland, Scotland and Wales, said, “We welcome the government’s ongoing financial commitment to the construction sector and the wider built environment. We urge the Government to ensure arrangements and resourcing plans are in place at local authority and agency level so funding can be efficiently converted into improvements in Ireland’s infrastructure and housing.

“We also commend Budget 2025’s commitment to climate and sustainability. However, in our view, the budget does not do enough to address the scale of the retrofit challenge facing Ireland, or the growing embodied carbon footprint of the construction sector.”