The wait is over. Check out the Ireland Budget 2026 highlights, key points, and major takeaways announced on October 7. Learn how the budget impacts you and your family.
Finance Minister Paschal Donohoe has unveiled Ireland’s Budget 2026, featuring key measures such as a new tax system for derelict properties, a cut to the hospitality VAT rate, and an extension of the rent tax credit for another three years. The budget also includes an extension of mortgage interest relief and a hike in cigarette duty, alongside changes to the minimum wage and VAT rates.
Unlike previous years, Budget 2026 moves away from one-off cost-of-living supports, focusing instead on long-term structural and fiscal stability.
✔️ USC (Universal Social Charge): 2% band ceiling raised by €1,318 to €28,700. 3% band starts above €28,700.
✔️ Reduced USC rates for medical card holders extended to 2027.
✔️ No changes to 20% and 40% income tax bands.
✔️ Derelict Property Tax: Replaces the Derelict Site Levy.
✔️ Derelict Property Tax: Rate: 7% of market value, effective after 2027.
✔️ Stamp Duty Reliefs for Farmers: Extended to the end of 2029 (includes woodlands).
✔️ Tax deduction for landlords: Extended 3 more years for property retrofits.
✔️ Micro-generation electricity income exemption: Extended to 2028 (€400 limit).
✔️ Electricity & Gas: 9% VAT extended to the end of 2030.
✔️ Hospitality: 9% VAT for restaurants & hairdressers from July 2026.
✔️ Hotels: No change.
✔️ Completed Apartments: VAT reduced to 9% until end of 2030.
✔️ Weekly social welfare payments: +€10 increase for most recipients.
✔️ Child Support Payment: Under 12: +€8 (€58/week), 12 and over: +€16 (€78/week)
✔️ Christmas Bonus: 100% bonus for qualifying recipients.
✔️ Working Family Payment: Income limits: +€60/week for all family sizes (now qualifies for fuel allowance)
✔️ Carers: Income disregard: €1,000 (single), €2,000 (couple).
✔️ Carers: Domiciliary Care Allowance: +€20 (€380/month).
✔️ Carers: Fuel Allowance: +€5/week (now €38/week).
✔️ Carers: CE & Tús Scheme: +€10 weekly increase.
✔️ Rent tax credit extended for three more years. Up to €1,000 (individual) / €2,000 (couple) per year.
✔️ Mortgage interest tax relief extended for two years. Relief: 20% (max €1,250 for 2025; reduced in 2026).
✔️ VAT on Completed Apartments: 9% (until end of 2030).
✔️ Stamp Duty Refund Scheme: Extended to 2030 for residential developments.
✔️ Cost Rental Housing: Rental profits exempt from corporation tax (from Oct 2025).
✔️ Living City Initiative: Extended to 2030. Applies to homes built before 1975. Expanded to Athlone, Drogheda, Dundalk, Letterkenny & Sligo.
✔️ Carbon Tax: Increase to €71/tonne (from Oct 2025).
✔️ EVs: €5,000 VRT relief extended to 2026.
✔️ Benefit-in-Kind (BIK): €10,000 exemption continues for 2026.
✔️ Reduces gradually until phased out by 2029.
✔️ New zero-emission vehicle category introduced with lowest BIK rate.
✔️ Cigarette prices increase by 50c per 20-pack from midnight, bringing the price close to €19.
✔️ A new vape tax to be introduced next month.
✔️ Minimum Wage: +65c → €14.15/hour (from Jan 2026).
✔️ Support for SMEs & Hospitality: Reduced VAT for restaurants and hairdressers from July 2026.
✔️ Community Employment & Tús: +€10 weekly increase.
✔️ Medical Card USC Relief: Extended to Dec 2027 (for incomes ≤ €60,000).
✔️ Farm Reliefs: Extended to 2029 — includes Farm Consolidation, Young Farmer, and Restructuring Relief.
✔️ Slurry Storage: Capital Allowance extended 4 years.
✔️ Carbon Tax: Petrol/Diesel: +€7.50 → €71/tonne (from Oct 2025). Other fuels increase applies from May 2026.
✔️ EV Relief: €5,000 VRT relief extended to Dec 2026.
✔️ Third-Level Fees: Permanent €500 cut, reducing max fee to €2,500.
✔️ Special Education: +860 special education teachers. +1,717 SNAs (from Sept 2026).
✔️ Educational Disadvantage: New DEIS+ programme for the most disadvantaged schools.
✔️ School Capitation: +€50 for primary/special schools (€274). +€20 for post-primary (€406).
✔️ Childcare: Increased funding for the National Childcare Scheme (NCS).
✔️ Childcare: +10% capitation rate for AIM Level 7 (supports children with special needs).
📞If you’d like to understand how Ireland’s Budget 2026 impacts your business or need clarity on any of the measures outlined above, our experts are here to help. Contact our team today for personalized guidance and professional support tailored to your business needs.
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