Changes to rental income rules under the Fair Deal scheme came into effect on 1 February 2024, which now allow landlords living in a nursing home to keep 100% of their rental income. This means the financial assessment of assets and income exempts rental income from a principal private home. However, if the property is not the principal home but is a vacation home or investment property, the usual 80% of the rental income is still levied.
Fast forward to February-March 2026: new rent reform plans are underway. It might impact current nursing home residents, with their principal homes covered under the Fair Deal Scheme. What are the key concerns? This blog draws some clarity.
National Rent Reform in Ireland: What’s Actually Changing
The Irish government has recently approved a set of new rental reforms that will take effect on March 1, 2026. While most changes are still unclear, they focus on the following points.
- Minimum Tenancy Duration: New tenancies created from March 2026 will have a rolling six-year minimum duration — giving tenants significantly more stability.
- Security of Tenure: During those six years, landlords can only end tenancies for specific reasons (e.g., tenant breaches, property no longer meeting needs). Smaller landlords can end them if they genuinely need the property for family or are in financial hardship situations, but larger landlords face stricter limits.
- Rent Caps: Rental costs may be capped at inflation to a certain amount. The current proposal is 2% per year or as per the current CPI.
- Market Rent Resets: Landlords may reset their rental cost every six years to match current market rates. However, the arrangement is subject to certain conditions that might need further clarification.
The Fair Deal Scheme and New Rental Rules: Intersections & Concerns
For property owners living in nursing homes and availing of the Fair Deal Scheme, the original 2024 update was significant.
Rental income from your principal private residence is no longer counted in your Fair Deal financial assessment. You can retain 100% of that income until the property is eventually sold — if it truly is your main home. Other rental income (e.g., from investment properties) continues to be assessed at 80%.
With the 2026 rent reforms, a few practical implications raise concerns for extended tenancy obligations for "Fair Deal Homes", here's how---
- New tenancies from March 2026 must run for at least six years. A Fair Deal resident’s property could be effectively tied up for that period if rented under the new system. That can be a benefit for income certainty — but it could also be a downside if circumstances change (e.g., family needs the home back sooner).
- Landlords (including those on Fair Deal) can still sell their rental properties with tenants in place at any time, but the tenancy protections and restrictions may affect sale value, timing and buyer appetite.
There’s public debate and political pushback, with some critics warning the new rules could discourage small landlords, sparking exits from the market and reducing rental supply.
Others say reforms fail to protect tenants or stimulate enough new housing. In particular, recent reporting flagged that Fair Deal families fear the six-year minimum tenancy rule could lock homes into long leases, potentially complicating family plans or inheritance arrangements.
What This Means for Property Owners — Practical Takeaways
If you’re renting out your principal home under Fair Deal—or considering doing so—review how the six-year tenancy obligations might affect your flexibility and objectives.
Longer minimum tenancies can mean a stable income, though it will require a mindset shift from short-term turnover. For many older landlords relying on rental returns for living expenses, such arrangements can be advantageous — but also less liquid if circumstances change.
Because the reforms intersect rental law, tax law, and Fair Deal assessment rules, specialist advice is more important than ever. It makes sense to speak to a solicitor or a fair deal scheme expert for grounded, personalised advice. Remember that strict compliance rules might be implemented by the Residential Tenancies Board (RTB) in the future, applying to rental regimes, including for private residences covered under the Fair Deal Scheme. Being well informed about the rules well in advance is critical to maintaining consistent services.
