Following months of research by the Housing Agency, public and Dáil debates and government deliberations, the Irish government has released a press-release on its proposed changes to rent controls and tenant protections in the private rented sector (PRS).
The government's stated overarching aim for the new policy measures is to incentivise development, provide market clarity and extend protections for renters. These policy developments come at a critical juncture for the sector. Last year saw a significant decline in new apartment construction with industry forecasts suggesting this downward trend could continue. The Government is implementing major changes to rent regulations in an effort to reverse this declining trajectory. This intervention reflects concerns that continued inaction could result in the state falling short of its target to build 300,000 new homes by the end of 2030 by up to 50 per cent—a shortfall that would have profound implications for housing supply and affordability.
James Browne, the housing minister, has received approval from government for the following changes to be made to the rent regulations in Ireland:
- Nationwide rent control system. The current rent pressure zones (RPZs) will be extended to a nationwide rent control system. Rent increases will still be limited to 2% or the Consumer Price Index (CPI), whichever is lower.
- Resetting Market Level Rent. Landlords will be able to reset the rent to market level at the end of each six-year tenancy, regardless of whether a tenant leaves, unless a "no fault eviction" arises. Tenant rent resets are permitted where a lease is terminated as a result of tenant breach or where a tenant leaves the tenancy voluntarily during the six-year cycle.
- Enhanced Tenant Protections. Tenancies created after 1 March 2026 will have the following increased protections. A six-year minimum term for tenants of "smaller landlords", landlords with three or fewer tenancies will have restricted termination grounds. Smaller landlords will only be able to terminate a tenancy: (i) during the six-year term for hardship or if an immediate family member requires the dwelling, and (ii) at the end of the six-year term for other "no fault" termination grounds that apply (sale, renovation, change of use or requirement or if the property is needed for use by a family member.
"No-fault evictions" will not be permitted by landlords of four or more tenancies except in "very limited circumstances". It remains to be seen what these "very limited circumstances" will be.
Further changes to the rent pressure zone system and tenancy protections will be affected on 1 March 2026.
Conclusion
We await further detail when the draft legislation is released which will provide us with further insight as to how these changes will play out.
The announcements this week are expected to generate varied reactions across the development, investment, and landlord sectors. Additional measures will likely be necessary to incentivise and reinvigorate development to the extent necessary to achieve our housing targets in light of rising costs and inflation which may well exceed the 2% capped increases. Industry representatives and commentary indicate that this economic gap could potentially be addressed through targeted fiscal measures, including tax incentives and development levy exemptions, which would help bridge the divide between development costs and investment returns. Nevertheless, it is positive that the chatter around what will happen with rent control in Ireland has been addressed as it is essential that the regulatory framework is clear and stable if we are to attract investment in the PRS sector. Hopefully, we are stepping closer to clarity that will enhance investor confidence, mitigate risk exposure, and facilitate strategic long-term planning—all essential components for sustainable market growth.
Whilst these policy measures are designed to improve returns and stimulate development activity, there may be transitional challenges to consider. Smaller-scale investors might find the evolving regulatory environment less attractive, potentially leading to further market exits that could temporarily impact rental for supply. Even with improved policy certainty, there will be a time lag before new developments materialise and begin to address current supply shortages.
We will keep a close eye on further developments and publish additional updates as soon as more information on these regulatory updates is available.
Please do not hesitate to contact the real estate team in Ireland or your usual Taylor Wessing contact for more information or if you have any queries at all.
