Taxes Consolidation Act 1997 section 81E

Enhanced deduction for eligible construction expenditure

Section 81E provides for an enhanced corporation tax deduction of 25% of eligible construction costs incurred by qualifying companies in respect of completed qualifying apartment blocks, subject to a maximum of €50,000 per apartment adjusted for ownership percentage.

• Companies carrying on a property development trade, or contractors building under contract for a beneficial owner who makes a formal written declaration, may claim a 25% enhanced deduction on eligible construction expenditure incurred in developing a qualifying apartment block of at least 10 apartments, where the first commencement notice is lodged between 8 October 2025 and 31 December 2030.
• Eligible expenditure covers construction costs incurred up to the date the certificate of compliance on completion is lodged, but excludes capital expenditure, land costs, financing and insurance costs, professional and legal fees, sales and marketing expenses, taxes and duties, and various statutory levies such as development contributions, utility connection charges, and planning fees.
• The enhanced deduction is capped at €50,000 per apartment in the completed development, multiplied by the claimant's percentage of beneficial ownership, and the claim must be made in the corporation tax return for the accounting period in which the certificate of compliance on completion is lodged, within 12 months of that period end.
• Expenditure is excluded from the enhanced deduction where it has been grant-assisted, exceeds arm's length amounts, or forms part of a tax avoidance arrangement, and if any debt included in eligible expenditure is subsequently released, a corresponding portion of the enhanced deduction is clawed back as a trading receipt.