Since the start of 2025, changes to the current Rent Pressure Zone (RPZ) system have been anticipated, fuelled by comments made at various stages by members of government. After much recent speculation, proposals were finally brought to cabinet on 10 June 2025.
At the heart of these proposals is concern at the drop off of new investment in residential developments against the backdrop of supply issues being a major factor in rent increases and the wider housing crisis.
This note explores a number of the current proposals as they have been reported (including in a press release on behalf of the Minister: https://www.gov.ie/en/department-of-housing-local-government-and-heritage/press-releases/government-to-introduce-major-reforms-to-the-rental-sector/) - they may well undergo some degree of change before ever being applied. As ever, the devil will be in the detail and we will issue updates as more specific information emerges when the required legislation is published.
- Changes for tenancies of new build apartments
One of the headline changes announced is that tenancies of new apartments (in developments where building work commences on / after 10 June 2025) will no longer be subject to the 2% restriction in the amount of rent increases when rent reviews are conducted. Such landlords would only need to have regard to the Consumer Price Index when reviewing the rent. This provision applies to new build apartments only.
The clear rationale for this, going by the media commentary and the press release from the Department of Housing, Local Government and Heritage, is an attempt to incentivise property investment in the residential sector (as it would allow a greater return on investment) and help begin to address the supply issues.
- What's planned for Rent Pressure Zones?
Following the introduction of the RPZ system in 2016 (initially restricted to major urban areas) there were effectively two systems in operation in the state – featuring properties within RPZs (being subject to restrictions on rent review increases) and those outside them (where rent review amounts were restricted only by reference to the local rental market). Over time, market rent increases have been such that RPZs were expanded to cover most urban areas of the country.
Under the new proposals, RPZ restrictions would apply to all existing tenancies, bringing rent review controls to all areas of the state. This will be brought about by legislation to be published in the coming weeks. In practice, this will result in a nationwide rent review cap of 2% or the rate of inflation, whichever is the lower.
- What is the ultimate aim for rent controls?
With the entire state going to be covered by the RPZ rent controls, the Minister states that future rent increases will be linked to inflation but, to protect tenants in time of high inflation, the 2% cap will be retained. This of course will apply to all tenancies except those of apartments which are built after 10 June 2025 which will be able to apply an inflation-based review without the 2% cap.
- How else will rent controls be changed?
As noted by the Minister, current rent controls are linked to the property, not the individual tenancy – the restrictions apply regardless of whether the rent is being reviewed in the context of a sitting tenant or at the commencement of a new tenancy with a "replacement tenant". This was to ensure that there would be no advantage for a landlord to change tenants as the same rent increase would apply regardless.
On tenancies commenced on / after 1 March 2026, landlords will be able to "reset the rent" to the current market rent in between tenancies. However, mindful of the risk of "economic evictions", the Minister stated that this option will not be available for "no fault" evictions. Therefore, it will only apply where a tenant has voluntarily left a tenancy (or, perhaps, where a tenancy has been terminated due to a breach by the tenant). It will also be possible to "reset the rent" at the end of a 6 year tenancy cycle (to apply to new tenancies commenced after 1 March 2026) where the rent at that point has fallen below the market rent.
The detachment of the controls from the property could assist in rental properties retaining their value as an investment. It could also perhaps allow landlords to consider reducing rent in particular circumstances, knowing that they would have an opportunity to return the rent to the market rate in due course. Currently, there is no incentive for a landlord in a RPZ to consider a rent reduction on the basis that the landlord is effectively "stuck" with that base rate against which any future rent reviews will be restricted by the 2% cap.
- Are there additional protections proposed for tenants?
Yes – again, according to the Department's press release, from 1 March 2026 a number of additional protections will come into effect, including:
- No-fault evictions of tenants by large landlords (those renting 4 or more properties) will be effectively banned apart from "very limited circumstances" – such as where the dwelling is no longer suitable to the needs of the tenant.
- For tenancies of small landlords (those renting 3 or fewer properties), tenants will benefit from 6 year rolling tenancies with more limited / restricted situations permitting no-fault termination by the landlord.
- During the 6-year period, terminations (apart from those relating to tenant breaches) will only be permitted in cases of particular hardship (which will be specified by legislation), needing the property for an immediate family member or where the dwelling is no longer suitable to the needs of the tenant
- Only at the end of the 6 year period may a smaller landlord terminate a tenancy for a number of specified grounds (similar to those currently available during a tenancy) including an intention to sell, a renovation of the property and change of use.
There is a lot to be covered off in legislation at which point further refinements or amendments will likely follow. The press release also notes that there will be no restriction on a landlord selling a property with a tenant in occupation. Media reports also suggests there will be increases in funding and support for the Residential Tenancies Board ("RTB") and that the government is considering increases in fines for landlords who breach the tenant protection rules.
So far, the RTB published a statement on 10 June 2025 simply saying that it will work with the Department and Minister to implement the new measures and will deliver a "…comprehensive national communication and engagement campaign on changes to Rent Pressure Zone (RPZ) and security of tenure rules". Presumably this will happen once the new legislation is published.
Already the reaction to the proposals has been mixed and there will be much more debate and commentary before any alterations take effect but, even with these headline proposals, it is clear that significant changes are ahead for the residential tenancies sector in Ireland.
The DACB Property Regulation team has over 15 years' experience advising clients who operate in the regulated Residential Landlord & Tenant sector. For further information, please contact one of our team members.
