Budget Summary 2027 – What does it mean for you & your business?

Oct 6

6 min read

TIMOTHY KELLIHER & COMPANY LIMITED

Budget Summary 2027

What the Budget announced on Tuesday 6 October 2026 means for individuals, families and businesses

1. Executive Overview

Budget 2027 is a package of about €8.7 billion: €1.6 billion of tax measures, €6.0 billion of extra day-to-day spending and €1.1 billion of extra capital investment. Total gross public expenditure for 2027 will be €125.6 billion, with a surplus of €9.5 billion still forecast.

The main theme is cost-of-living relief with fiscal caution. There is a €1.3 billion personal income tax package, lower carbon tax on home heating, a €10 rise in weekly welfare rates and a fall in childcare fees. There are also some welcome moves for business owners, including a lower rate of Capital Gains Tax.

2. Personal Tax & Income

Income tax: bands and credits (2027)

Measure	Current	From 2027	Change
40% threshold (standard rate band): single person	€44,000	€46,500	+€2,500
Single parent (Single Person Child Carer Credit)	€48,000	€50,500	+€2,500
Married couple / civil partners (one income)	€53,000	€55,500	+€2,500
Personal Tax Credit	€2,000	€2,125	+€125
Employee (PAYE) Tax Credit	€2,000	€2,125	+€125
Earned Income Credit (self-employed)	€2,000	€2,125	+€125
Home Carer Tax Credit	€1,950	€2,050	+€100

• Two-income couples also get a proportionate increase in the band.

• The Department of Finance says someone earning €50,000 will pay over €700 less in income tax and USC. A two-income couple earning €100,000 between them will pay €1,500 less.

Universal Social Charge (USC), from 1 January 2027

• The ceiling of the 2% band rises by €1,600, from €28,700 to €30,300. The rates themselves do not change.

• Rates: 0.5% on the first €12,012; 2% to €30,300; 3% to €70,444; 8% above that. Income under €13,000 is exempt. A 3% surcharge continues on self-employed income over €100,000.

Minimum wage and employer PRSI

• The national minimum wage rises from €14.15 to €14.94 per hour. The USC change ensures a full-time minimum wage worker stays out of the higher USC rates.

• To help employers, the employer PRSI threshold rises from €552 to €600 per week for 2027. This saves €650 to €700 a year per employee below the threshold.

Savings and investments

• A new Investment Account opens on 1 July 2027. The limit is €12,000 a year and the first €50,000 of value is tax-free, with a flat 1% charge above that. There is no CGT, dividend withholding tax or deemed disposal, and the provider handles the tax.

• Exit tax on Irish funds, ETFs and life assurance policies falls from 38% to 35% from 1 January 2027.

• The microgeneration exemption for selling surplus electricity to the grid rises from €400 to €600.

3. Housing, Property & Wealth

• Rent Tax Credit increases by €150 to €1,150 for a single person and by €300 to €2,300 for a couple. It applies for the 2027 and 2028 tax years.

• Help to Buy: the maximum refund for first-time buyers rises from €30,000 to €35,000, effective from 7 October 2026. The 10% of purchase price and the income tax and DIRT paid limits stay.

• Rent-a-Room relief: the tax-free ceiling rises from €14,000 to €16,000 from 1 January 2027. The relief now covers certain detached auxiliary dwellings (garden or modular units of 32 to 45 sq m) installed after 27 July 2026.

• Derelict Property Tax: a new 7% annual tax on the value of derelict property in towns with a population of 4,000 or more. Preliminary registers will be published on 1 September 2027.

• Residential Zoned Land Tax: landowners get another chance to request a rezoning and an exemption for 2027.

Inheritance and gift tax (Capital Acquisitions Tax)

Group (relationship to giver)	Current	From 7 Oct 2026	Change
Group A (e.g. child)	€400,000	€420,000	+5%
Group B (e.g. sibling, niece, nephew)	€40,000	€44,000	+10%
Group C (all others)	€20,000	€22,000	+10%

The CAT rate stays at 33%. The new thresholds apply to gifts and inheritances taken on or after 7 October 2026.

4. Business, SMEs & Employment

• Capital Gains Tax standard rate falls from 33% to 31% for disposals on or after 7 October 2026. The 33% rate on development land is unchanged.

• Start-up relief (section 486C): corporation tax relief for new companies is extended to 31 December 2030.

• Investor reliefs: the Employment Investment Incentive, Start-Up Capital Incentive, SURE and Angel Investor Relief are to be extended. This is subject to the new EU State aid rules taking effect on 1 January 2027.

• Preliminary corporation tax: the small company threshold rises from €200,000 to €350,000. A company will meet its preliminary tax obligation by paying at least 80% of the current-year liability on time and topping up within four months of year-end.

• Payroll reporting: from 1 January 2027, employers can choose between reporting in real time or by the 14th of the following month for certain tax-free benefits (Enhanced Reporting Requirements).

• Professional Services Withholding Tax will move from a flat 20% to personalised deduction rates, and self-employed people will be able to opt in to real-time information exchange with Revenue. Both are subject to a Commencement Order.

• R&D tax credit is enhanced. Subcontracting limits rise to 20% / €200,000 and the first-year payment threshold to €105,000, with a new 5% uplift on qualifying R&D wage costs. The Knowledge Development Box is extended to 2032.

• Childminders: the Childcare Services Relief ceiling rises from €15,000 to €20,000, and the cap on the number of children is removed.

• Farming: the Flat Rate Addition rises to 4.8%, the Succession Farm Partnership credit doubles to €10,000, VAT on livestock respiratory vaccines falls to 9%, and the farm safety accelerated allowance is extended to 2029.

• Other: a €1 billion ISIF scale-up programme and €15 million for rural pubs. The Bank Levy continues for 2027.

5. Social Welfare, Cost of Living & Energy

Welfare and pensions (weekly rates)

• €10 increase in weekly social welfare payments, including pensions, jobseekers, carers and disability payments, benefiting around 1.6 million people.

• New €500 Cost of Disability payment for around 238,000 people on long-term disability payments.

• Fuel Allowance up €5 a week, and the income limit for single pensioners rises from €534 to €641 a week. Living Alone Allowance up €3 a week.

• Child Support Payment up €6 a week, to €64 (under 12) and €84 (12 and over). Working Family Payment income thresholds up €30 a week.

• Christmas Bonus: it was not mentioned in the Budget documents published today. We will confirm the arrangements once the Department of Social Protection publishes its detailed rates.

Carbon tax and fuel

• Home heating: carbon tax on kerosene and natural gas is cut to €48.50 per tonne of CO2 (from €63.50) and held there until 2030. That is roughly €43 less on 1,000 litres of kerosene and €32 less on 11,000 kWh of gas.

• Petrol and diesel: the planned rise on 14 October 2026 is deferred to 1 May 2027 (to €78.50), with a further rise on 13 October 2027.

• Excise duty: reduced petrol and diesel excise stays in place until 28 February 2027. It is then restored in four steps, on 28 February, 8 April, 1 May and 30 June 2027 (full restoration).

• Vehicles: Electric Vehicle VRT relief is extended to 31 December 2028. VRT on higher-emission cars (bands 3 to 20) rises by 1% from 1 January 2027.

• Other duties: €1 on a pack of 20 cigarettes and 20c per ml on e-liquids.

Childcare and education

• Maximum childcare fees fall from €735 to €550 a month, saving up to €2,220 a year per child.

• Student contribution fee reduced permanently by €150, with new grants for families with more than one child in higher education. SUSI maintenance grants rise by 4.5% from January.

• Tax relief for third-level fees is aligned with the student contribution fee level.

Important note

These measures are based on the Budget announcements and the Department of Finance Tax Policy Changes document of 6 October 2026. They remain subject to enactment in the Finance Bill (and the Social Welfare Bill for welfare changes), so details may change. This briefing is general information and does not constitute personal tax advice. If you would like to talk through how Budget 2027 affects you or your business, please get in touch.

Timothy Kelliher FCA | Timothy Kelliher & Company Limited | Chartered Accountant

Phone: 064 663 2105 | WhatsApp: 064 663 2105 | Email: info@timothykelliher.ie