Inheritance Tax Revenue Surges with Rising Property Values in Ireland.

In 2024, the Irish government saw a significant increase in inheritance tax revenue, largely due to escalating property values. Capital Acquisitions Tax (CAT) receipts rose by over €220 million, totalling nearly €854 million. Dublin, known for its high property prices, contributed over half of the total CAT collected. The CAT rate remains at 33%, applied to the market value of inherited assets.

Despite an increase in the tax-free threshold for children from €335,000 to €400,000, it still falls short of the previously promised €500,000. With the median house price in Ireland at €350,000 and areas like Dun Laoghaire-Rathdown reaching €645,000, more estates are becoming liable for inheritance tax. The Parliamentary Budget Office has suggested taxing the €1 trillion in household wealth to reduce dependency on volatile taxes from corporations, income, and consumption.

Irish House Prices Expected to Grow Slower in 2025 Amid Ongoing Supply Issues.

Ireland’s property market experienced significant price hikes in 2024, driven by high demand, population growth, and increased employment, all exacerbated by limited supply. Buyers, including remote workers, favoured areas outside cities, leading to price increases of 13.5% to 15% in counties like Leitrim and Longford. Nationwide, prices rose by 10.3%, surpassing the estimated 4.9%.

The Central Statistics Office reported a 9.7% annual increase by October 2024. Despite increased construction, the number of new homes transacted remained nearly static, contributing to rising prices. Supply constraints, higher household incomes, and increased equity led to competitive buying. With a decline in second-hand homes, the market faced further strain. Estate agents predict a slower price increase of 7% for 2025, contingent on the ongoing supply challenges.

Landlords to Be Banned from Demanding Huge Upfront Fees from Tenants.

The UK government is implementing a law to cap upfront fees landlords can demand from tenants to one month’s rent, making it illegal for landlords to charge several months rent in advance. This change, part of the Renters Rights Bill, aims to alleviate financial burdens on renters and prevent discrimination against poorer tenants.

Shelter reports over 800,000 private renters have been unable to secure homes in the past five years due to unaffordable advanced payments. However, landlord groups argue that this restriction could harm tenants with poor or variable credit, as it reduces landlords financial assurances. The bill will also ban section 21 no-fault evictions, preventing landlords from evicting tenants without a valid reason.

UK House Prices Rise by 3.3% in 2024; Modest Growth Expected in 2025.

In 2024, UK house prices increased by 3.3% annually, with the average house price reaching £297,166, according to Halifax. This growth was driven by falling mortgage rates, rising incomes, and impending stamp duty changes. Northern Ireland experienced the highest growth at 7.4%, while London remained the most expensive area with a 3.3% increase, bringing its average to £547,614. For 2025, modest growth is expected, contingent on employment and affordability factors.

The end of stamp duty relief for first-time buyers in April 2025 could lead to a temporary price hike as buyers rush to meet the deadline. Regions like the Midlands and Northern England might outperform the UK average, with a forecasted 2.5% annual increase in property values by Zoopla. Potential buyers are advised to secure favourable mortgage rates by having a higher deposit, improving credit scores, and considering mortgage brokers for more options.

Our Predictions for the UK Housing Market in 2025.

In 2025, the UK housing market is influenced heavily by interest rates and their impact on mortgage availability. Despite a slight decline in interest rates in 2024, further rate cuts are anticipated to boost economic growth; if not, buyers may refrain from purchasing or offer lower bids. Property prices in 2024 rose by 4.7% nationally, although growth was stronger in lower-priced northern regions compared to the more expensive southern regions, which saw smaller increases. Stamp duty changes effective April 1 will likely cause buyer rushes prior to the deadline but may result in increased prices.

First-time buyers, benefiting from the ‘Bank of Mum and Dad’ dominate the market. The rental sector grapples with high demand and upcoming regulations, while landlords face high mortgage rates and tax burdens, leading many to sell properties. Prime central London could see a 5% price decline due to tax impacts on wealthy buyers, though properties in affluent suburbs might still attract buyers seeking good state schools.

Tax Reforms Needed in Budget 2025 to Prevent ‘Rental Market Collapse’.

The Irish Property Owners Association (IPOA) is urging the government to implement tax reforms in Budget 2025 to address the mass departure of property owners from the rental market. The IPOA’s Budget submission highlights key taxation reforms, including an extension of Capital Gains Tax (CGT) relief, a reduction in Capital Acquisitions Tax (CAT) for inherited rental properties, business taxation for private landlords, and the introduction of a standard 25% tax rate on all rental income.

The association maintains that a lack of meaningful changes aimed at rebalancing the rental market will exacerbate the housing crisis, driving up rents and reducing the availability of homes. The IPOA emphasizes that without immediate action, Ireland’s rental market risks collapse—a situation that can be avoided with meaningful supports.