The Government announced significant proposed changes to the Irish residential rent control system on 10 June 2025. These changes are intended to increase the supply of rental accommodation and attract crucial investment. Legislation will be required to implement these changes and is expected in the coming months. The new changes will take effect from 1 March 2026.
These changes follow a period of intense scrutiny by the Government of the current Rent Pressure Zone (“RPZ”) system amidst recognition that the current rules have had an unintended negative impact on investment and housing supply. Introduced in 2016 as a temporary measure, a RPZ is a designated area where annual rent increases are currently capped in line with the rate of inflation as recorded by the Harmonised Indices of Consumer Prices (HICP) or 2%, whichever is the lower.
The Government has decided to retain the RPZ system but make significant key changes to balance tenant’s protections against the need to stimulate greater volumes of residential development.
The exact detail of these proposed measures will not be known until the draft legislation is published but we set out below a summary of the proposals approved by Government yesterday.
- RPZs which already apply to most large urban areas in Ireland will be extended nationally.
- The rents for new build apartments will not be subject to the current 2% cap but will be linked to inflation and capped by the Consumer Price Index (“CPI”). This applies to new apartment developments commenced on or after 10 June 2025.
- Landlords of tenancies created on or after 1 March 2026 will be able to reset the rent levels to market rent between tenancies provided the outgoing tenant has left voluntarily or as a result of the tenant’s breach of their obligations.
- Landlords of tenancies created on or after 1 March 2026 will be able to reset the rent levels to market rent at the end of each 6 year tenancy period unless a “no-fault” eviction occurs.
- There will be a new distinction between “large” and “small” landlords. Large landlords are those who have four or more tenancies and small landlords are those with three or fewer tenancies. Different termination rules will apply to large and small landlords.
- There will be very limited circumstances in which large landlords will be able to end a tenancy where the tenant has complied with their obligations.
There will be no change to the existing rights of landlords to sell a property with a tenant in-situ at any time or to terminate a tenancy where the tenant has breached their obligations or the property is no longer suited to the tenant’s needs.
Many, if not most, commentators were expecting more widespread changes to the existing RPZ regime and it remains to be seen if the proposals will attract much-needed large scale development to the residential sector in Ireland. At the very least, the Government’s announcement brings some clarity to the issue of rent control, ending many months of uncertainty and speculation, which in our view will have a positive impact on the market.
Further details on these measures will be available over the coming months and we will update you accordingly. In the meantime please get in touch with Commercial Real Estate partner, Sally Anne Stone or senior associate, Laura James or your usual Commercial Real Estate Department contact should you require further information.