Budget 2027 brings a number of significant changes for individuals, businesses, employers and investors in Ireland.

From changes to income tax, tax credits and USC to a reduction in Capital Gains Tax, new investment measures and changes affecting employers, Budget 2027 contains plenty for business owners and individuals to consider.

Our Tax team has reviewed the key announcements and what they could mean in practice. Here are some of the main measures from Budget 2027.

Income Tax, Tax Credits & USC

Budget 2027 introduces changes to income tax bands and credits, alongside an adjustment to the USC bands.

  • The 20% income tax band increases to €46,500 for single individuals, €50,500 for single parents and €55,500 for married one-income couples.
  • The combined 20% band for married couples with two incomes increases to €93,000, subject to the applicable transfer limits.
  • The Single Person, PAYE and Earned Income tax credits increase by €125 to €2,125.
  • The Married Person tax credit increases to €4,250, while the Single Child Carer Credit increases to €2,025.
  • The Home Carer Tax Credit increases by €100 to €2,050.
  • The 2% USC band is extended, with the upper threshold increasing from €28,700 to €30,300.

Capital Gains Tax & Investment

There are notable changes for investors and business owners, including a reduction in Capital Gains Tax and the introduction of a new State Investment Scheme.

  • The standard Capital Gains Tax rate falls by two percentage points to 31%.
  • Exit tax/deemed disposal on existing investment products falls by three percentage points to 35%.
  • A new State Investment Scheme will offer tax-free investment in stocks and shares, subject to specified limits.
  • Individuals will be able to invest up to €12,000 per year, with no tax on funds up to €50,000.
  • Amounts above €50,000 will be subject to a 1% annual tax.
  • Accounts under the new scheme are expected to become available from July 2027.

Employers, PRSI & Minimum Wage

Employment costs remain an important consideration for Irish businesses, with changes to both the National Minimum Wage and PRSI.

  • The National Minimum Wage increases by €0.79 to €14.94 per hour.
  • The employer PRSI threshold increases from €552 to €600 per week from 2027.
  • The report notes that the higher minimum wage comes alongside other employment costs, including auto-enrolment and statutory sick pay.
  • Employers should assess the combined effect of these changes when budgeting and planning workforce costs for 2027.

First-Time Buyers, Renters & Inheritance Tax

Budget 2027 contains several changes affecting home buyers, renters and those planning to pass wealth to the next generation.

  • The Help to Buy Scheme increases by €5,000 to €35,000.
  • The Rent Tax Credit increases by €150 to €1,150 for single renters and €2,300 for couples.
  • The tax-free threshold under Rent-a-Room Relief increases to €16,000 and is extended to include newly installed detached auxiliary dwellings.
  • The Category A Capital Acquisitions Tax threshold increases by €20,000 to €420,000.
  • Category B increases to €44,000, while Category C increases to €22,000.

Housing & Infrastructure

Significant funding has been allocated to housing and infrastructure as part of Budget 2027.

  • €9.4 billion has been allocated for housing.
  • €3 billion will fund social housing delivery, including 11,250 new-build social homes.
  • €225 million has been allocated to the Housing Infrastructure Investment Fund.
  • €2.3 billion has been allocated to Uisce Éireann, including €1.5 billion to build capacity and resilience.
  • An additional €6 billion has been allocated to progress MetroLink between 2027 and 2030.

Energy, Climate & Farming

Budget 2027 also includes measures covering energy costs, electric vehicles, climate investment and the agricultural sector.

  • The restoration of excise on petrol and diesel has been postponed, with full restoration not due until 30 June 2027.
  • VRT relief for electric vehicles is extended for a further two years to 31 December 2028.
  • €654.5 million has been allocated to SEAI residential and community energy upgrade schemes.
  • The Succession Farm Partnership tax credit doubles from €5,000 to €10,000.
  • The three-year holding period for applications relating to Succession Farm Partnerships is being removed.
  • VAT on respiratory vaccines for livestock is reduced from 23% to 9%.

Welfare, Childcare, Education & Health

A range of measures are also aimed at households and the cost of living.

  • Pension and welfare rates increase by €10, alongside changes to carers’ supports and other welfare payments.
  • Childcare measures target savings of €2,200 per year for a child in full-time care.
  • The tax-free income limit for people minding children in their own homes increases from €15,000 to €20,000.
  • The third-level student contribution fee falls by €150 to €2,350.
  • The health budget increases by €1.7 billion to €29.1 billion, with additional funding for mental health services and other healthcare measures.

What Does Budget 2027 Mean for You?

As Fitzgerald Power Tax Partner Brian Kelly notes in our Budget 2027 report, the impact for business owners should not be assessed through any single measure. Changes to CGT, investment incentives, succession planning, R&D and employment taxes need to be considered together and against the plans for the business.

Our Budget 2027 Report provides a concise breakdown of the key announcements and the changes businesses and individuals should be aware of as they plan for the year ahead.

Download the full Budget 2027 Report – Here

If you have questions about how the Budget 2027 measures could affect you or your business, contact a member of the Fitzgerald Power Tax team.