The gift of money to a child, grand-child or a great-grand child will be exempt from inheritance tax up to €100,000 per donor to each donee.

In the absence of a descendant, nieces and nephews are eligible.

Both parents and grandparents can make the gift, up to a maximum of €300,000, subject to €100,000 per donor.

The allowance is cumulative with the existing allowances of €100,000 per parent per child and the allowance of €63,730 between each grandparent and each grandchild.

The money must be used for the purchase or construction of a new principal residence, or for improvements to the energy efficiency of the existing home of the beneficiary.

Accordingly, the allowance cannot be used for the purchase of an older property, although it can be used to upgrade the thermal efficiency of such a property.

The purchase must be made, or construction/renovation works commenced within 6 months of the gift being made.

Once the property has been purchased, or after the construction/renovation has been completed, the beneficiary must retain ownership of the property for at least 5 years.

It does appear from the text that the beneficiary would be entitled to let out the property to a tenant using the property as their principal residence. The tenant cannot be a member of the same tax household.

Although the administrative doctrine has yet to be published it is anticipated that a 'new' property is one that was built in the past 5 years, as has been the case for similar temporary exemptions in the past.

However, if the money is used in this way, it does appear from the text that it is not cumulative with other tax allowances for such works, or grants under the MaPrime Renov energy improvements scheme. We await final confirmation from the tax office.

At this stage, the duration of the exemption is for a year, with the principal aim being to try and boost the new-built housing market. It would therefore be unwise to assume it will be carried forward into 2026.