Rent pressure zones: What are they and what changes are set to come into effect?

Tomas Doherty

There are calls for new rules around renting to come in sooner to protect tenants from increases.

The expansion of Rent Pressure Zones to the entire country, along with minimum duration tenancies, were announced by the Government this week, and legislation is set to be brought forward in the coming weeks.

Further changes to the rent pressure zone system and the improved tenancy protections will come into effect on March 1st, 2026.

A country-wide cap of 2 per cent on all existing tenancies will come into effect from next March, with increases for new build-to-rent apartments being linked to the rate of inflation.

Rent pressure zones (RPZ) were introduced in 2016 to help control spiralling costs for tenants.

Here is everything you need to know about RPZs.

What are rent pressure zones?

The RPZ system was introduced in 2016 to cap rent increases in areas where there is high demand for housing and rental homes.

The regulations, which apply to certain areas of high demand for housing, are due to expire on December 31st.

An area designated as an RPZ has annual rent increases capped at 2 per cent or at the rate of inflation, whichever is lower, even if there is a change of tenant.

However, not all rented properties in RPZs are subject to rent caps. Landlords can be exempt from the rent caps if the property has not been rented for a period of two years or if it has undergone a "substantial change in the nature of the accommodation".

Where are rent pressure zones?

RPZs now cover most of the country – 111 of the State's 166 local electoral areas are under the rent cap system.

Many of the major towns and cities in the Republic are RPZs, along with touristic areas such as Killarney, Westport and Connemara.

Castlebar in Co Mayo and Tullow in Co Carlow are the latest areas to become RPZs.

What is rent like in current non-RPZs?

As a country-wide cap of 2 per cent on all existing tenancies is set to come into effect from next March, some have voiced concerns that landlords will hike rents ahead of the changes.

Here are some examples of rent rates in current non-RPZs:

• Rosslare - €2,181;
• Roscommon - €2,095;
• Belmullet - €1,461;
• Ballyjamesduff - €1,118;
• Kilrush - €1,021;
• Donegal - €736.

Why would the Government want to scrap rent pressure zones?

There has been concern within the Government that RPZs have negatively impacted the level of private investment in housing developments, amid increasing pressure to meet new-build targets.

Fianna Fáil and Fine Gael are under increasing pressure to tackle the State’s housing crisis after it emerged that 30,330 homes were built last year, far short of the projected 40,000 new builds put forward by the parties.

The debate over RPZs also stems from a report by the Housing Commission that recommended a new form of rent control.

The report published in May last year said landlords had been constrained by the RPZ regime and reported a lack of policy certainty and diminished net rental returns.

It also highlighted that tenants were still experiencing affordability challenges due to historically high rents, while those seeking to find rental accommodation were met with low availability.

The commission said the evidence for the effectiveness of the RPZ system was "mixed", and suggested that rent regulation needs to be made fit for purpose for the longer term.

The report said the Government should regulate market rents fairly and effectively by reforming current regulations and establishing “reference rents”.

This would have replaced RPZs with a system that pegs rent to local dwellings of a similar quality.

In the proposed new system, the reference rent rate would be reviewed at regular intervals and rent would not rise more than a certain percentage above this reference rent over a specific period.

This rent regulation would continue to transfer between tenancies, so that if a tenancy ends the same regulations apply to the subsequent tenancy, discouraging the termination of tenancies purely to increase rental income.

This new form of rent control would apply across the country, not just in specific zones.

What has the government confirmed?

The Government has announced new policy measures to boost investment in the supply of homes for rent and provide certainty to the wider residential market, while further extending protections for renters.

The cabinet has approved the extension of current rent pressure zones to a nationwide rent control system with legislation being brought forward in the coming weeks.

Further changes to the rent pressure zone system and the improved tenancy protections will come into effect on March 1st, 2026.

These decisions have been informed by the findings of the Housing Agency Review of Rent Pressure Zones and Potential Policy Options, and the Agency’s preferred recommendation to modify the existing operation of the current rent controls, the Government said.

Minister for Housing, Local Government and Heritage, James Browne said: "The government has today approved stronger protections and greater certainty for renters, while creating new measures, as part of a suite of work being undertaken to boost supply of new homes and retaining existing landlords in the market.

“We are not building enough apartments to cope with demand. We know we need to build 50,000 homes per year. I’m determined to get there.

We will be extending rent controls nationally to protect all tenants. This would simplify the operation of rent controls and ensure that all tenants are offered rent control protections.

“Rent increases nationally will be linked to inflation. However, to protect tenants in times of high inflation, it is proposed to retain the cap on permissible rent inflation at 2% with limited exceptions.

“Furthermore, in order to provide greater security of tenure for tenants, the government will also introduce legislative changes to significantly restrict ‘no fault evictions’. These changes will further enhance the current provision of tenancies of unlimited duration with the introduction of rolling tenancies of a minimum of six-years.

Fears of landlords hiking rents

Political correspondent with the Irish Independent, Gabija Gataveckait, has said there are fears some landlords will hike rents ahead of the changes next year.

"There's even a question around why can't all these changes take place as soon as to avoid either landlords hiking rents now if they can or the hoarding of properties.

"The answer from government is because they have those new rules around the sixth year minimum duration tenancies. They need to give time to the sector so that they can prepare and know exactly what the new rules are."