Dublin, June 8, 2025 — The Irish government has introduced draft regulations to exempt newly-built rental properties from the 2% annual cap on rent increases in Rent Pressure Zones (RPZs), opting instead to tie rent hikes to the Consumer Price Index (CPI). The proposals, brought before Cabinet by Housing Minister James Browne, aim to boost apartment construction during Ireland’s persistent housing shortage.
Under existing RPZ rules, rents cannot rise by more than 2% annually in designated high-demand areas, where affordability challenges are most acute. The new plan would apply only to apartments first let after a specified date, preserving the cap for existing tenancies. Landlords could reset rents to market levels between tenancies, though CPI-tied increases would limit subsequent annual rises.
“By aligning rents with inflation rather than a fixed rate, we believe developers will have greater certainty to invest in new housing stock,” said Minister Browne. “This measure balances the need for construction incentives with protections for current tenants.”
Critics, including Labour housing spokesman Conor Sheehan, warn that CPI-based increases could outpace wage growth and expose renters to steeper hikes compared to the 2% safeguard. Tenant advocacy groups have called for targeted supports for low-income renters if the exemption proceeds.
The draft regulations are also expected to include a threshold date, beyond which apartment schemes will qualify. Government sources indicate that existing tenants will face no changes unless they vacate their units, at which point incoming renters will fall under the new regime.
Developers have broadly welcomed the proposal as a step toward closing a €100,000 viability gap per new apartment, which has deterred investment in private rental builds. Industry representatives emphasise the importance of complementary measures, such as grants for brownfield redevelopment and streamlined planning processes.
If approved by Cabinet, the regulations would be published for public consultation before being enacted later this year. Housing officials caution that while the exemption could spur construction, it must be paired with broader reforms to address supply-side bottlenecks and ensure affordability.
Key Facts
Under existing RPZ rules, rents cannot rise by more than 2% annually in designated high-demand areas, where affordability challenges are most acute. The new plan would apply only to apartments first let after a specified date, preserving the cap for existing tenancies. Landlords could reset rents to market levels between tenancies, though CPI-tied increases would limit subsequent annual rises.
“By aligning rents with inflation rather than a fixed rate, we believe developers will have greater certainty to invest in new housing stock,” said Minister Browne. “This measure balances the need for construction incentives with protections for current tenants.”
Critics, including Labour housing spokesman Conor Sheehan, warn that CPI-based increases could outpace wage growth and expose renters to steeper hikes compared to the 2% safeguard. Tenant advocacy groups have called for targeted supports for low-income renters if the exemption proceeds.
The draft regulations are also expected to include a threshold date, beyond which apartment schemes will qualify. Government sources indicate that existing tenants will face no changes unless they vacate their units, at which point incoming renters will fall under the new regime.
Developers have broadly welcomed the proposal as a step toward closing a €100,000 viability gap per new apartment, which has deterred investment in private rental builds. Industry representatives emphasise the importance of complementary measures, such as grants for brownfield redevelopment and streamlined planning processes.
If approved by Cabinet, the regulations would be published for public consultation before being enacted later this year. Housing officials caution that while the exemption could spur construction, it must be paired with broader reforms to address supply-side bottlenecks and ensure affordability.
Key Facts
- Date of announcement: June 8, 2025
- Policy change: Exemption of new-build rentals from 2% RPZ cap; CPI-tied increases instead
- Affected properties: Apartments first let after a specified threshold date
- Stakeholders: Housing Minister James Browne, developers, tenant groups, Labour Party
