Budget 2026 Highlights

Minister for Finance, Paschal Donohoe delivered the final Budget today, 7 October 2025. Below we outline the highlights of Budget 2026.

No changes announced to Income Standard Rate Bands with the single band remaining at €44,000, with the married single earner at €53,000, and the married dual income band at €88,000.
Personal, PAYE, Earned Tax credits: similarly no changes to personal tax credits.
Rent Tax Credit: while remaining at €1,000, a commitment to increase over time was announced along with an extension of the credit to the end of 2028.
Small change to the second rate-band of Universal Social Charge to €28,700. The concession for full medical holders earning less than €60,000 is to be extended by two further years.
Mortgage Interest Tax Relief extended for a further two years with a reduced value applying in the final year.

Entrepreneur Relief: the lifetime threshold increases to €1.5m from 1^st January 2026.
Key Employee Engagement Programme (KEEP) is being extended to the end of 2028.
The Special Assignee Relief Programme is being extended for a further five years, with the minimum qualifying income increasing to €125,000 to ensure the relief is appropriately calibrated. Measures to be introduced in the Finance Bill to streamline the administration process.
Foreign Earnings Deduction extended for a further five years.
The Research & Development Tax Credit is increasing from 30% to 35% and first year payment threshold increased from €75,000 to €87,500.
Participation Exemption extended to jurisdictions where no refundable withholding taxes apply.
Subject to commencement orders, the Section 481 Film Tax Credit is being enhanced to provide for a new 40% rate of relief for productions of at least €1m qualifying expenditure on visual effects work.
Digital Games Tax Credit extended to 2031, however this is subject to a commencement order.
A joint Department of Finance and Revenue along with public consultation on Withholding Taxes.

A further opportunity for exemption in 2026 from the Residential Zoned Land Tax (RZLT) if landowners seek to have their lands re-zoned.
Exemptions or reductions in Corporation Tax on profits from the sale of some apartments, included in Cost Rental Schemes.
An enhanced Corporation Tax deduction for construction and conversion of apartments – from 8 October to end of 2030.
A Derelict Property Tax will replace the site levy which currently is charged at 7%. No rate yet announced but it is anticipated that it will not be less than 7%. Preliminary registers of dereliction will be published in 2027, with the tax being applied soon afterwards.
VAT rate of 9% on sale of new apartments from 8 October.
Residential Development Stamp Duty Refund Scheme is to be extended to 2030.
Living City Initiative extended to 2030 in special regeneration areas, an increase scope of properties for those constructed prior to 1975 and extending to “over the shop” properties. Five new regional centres being introduced into the initiative. Finally, relief is being increased from €200,000 to €300,000.
The deduction for Pre-Letting Expenditure from rental income will be extended for a further three years, to the end of 2030. The deduction is capped at €10,000 per property.
Home Building Finance Ireland to have additional funding of €200m to support home builders.

VAT

In addition to the changes applying to the sale of new apartments, the reduced 9% rate will apply from 1 July 2026 for food catering businesses and hairdressing.
The 9% VAT rate for Gas and Electricity supplies is extended to the end of 2030.
Revenue are to introduce a phased role out of domestic electronic invoicing.

The four Agricultural Tax Reliefs pertaining to Stamp Duty and Capital Gains Tax have been extended to 2029. The Farm Restructuring Relief is being expended to include woodlands and forestry.
The Extended Capital Allowance regime for slurry storage facilities has been extended for a further four years.

The Carbon Tax increase to €71 per tonne of CO2 emitted applies to auto fuels from 8 October and to all other fuels from 1 May 2026.
VRT Relief on electric vehicles extended for a further one year.
The Universal Relief on the OMV on electric vehicles will remain at €10,000 in 2026 and taper off to €5000 in 2027, €2,500 in 2028 and cease in 2029.
Accelerated Capital Allowances on Energy Efficient Equipment extended for a further five years to end of 2030.
Income tax disregard of €400 for income received by households who sell electricity to the grid extended to 2028.

The rate of tax on offshore funds and foreign life assurance products is to be reduced from 41% to 38%.
The bank levy will remain for a further year.
A separated Pool Betting charge to be announced after consultation in Budget 2027.
Excise Duty on tobacco products will increase by 50 cent from 8 October.