Budget 2027 is being unveiled today.
The €8.5 billion package, €1.65 billion of which will allow for tax reductions, is currently being announced in the Dáil.
Simon Harris said this Government’s second budget, and his first as Minister for Finance, “balances today’s needs with tomorrow’s musts”, and is fair to those “working now” as well as those who are retired.
But what is in the budget and what does it have for you? Here are the Budget 2027 main points.
Income tax
An income tax package of €1.3 billion has been announced.
Harris said the changes will see workers earning €50,000 a year paying over €700 less in income tax and USC.
Minimum wage
- A 79 cent increase in the minimum wage is expected, which would bring the current rate from €14.15 per hour to €14.94.
Social welfare, disability supports and carers
- €10 increase in pension and welfare rates.
- An annual cost-of-disability payment of €500.
- Income disregard for carer’s allowance to rise by €150 for a single person and €300 for a couple.
- The child support payment to rise by €6 while the living alone allowance to rise by €3 per week.
- Home carer tax credit increased by €100
Housing, rent tax credit, inheritance tax
- First time buyers will be able to access up to €35,000 towards the deposit on their first home, under the Help-to-Buy scheme after €5,000 increase, though no increase in value of eligible properties (€500,000).
- Rent tax credit will rise by €150 to €1,150.
- Tax-free threshold for earnings under the rent-a-room relief will rise to €16,000 and will be extended to include newly installed detached auxiliary dwellings.
The three inheritance tax thresholds have been increased.
- The Category A threshold for inheritance tax from parents to children will increase by €20,000 to €420,000.
- The Category B threshold, which covers inheritances received by siblings, nieces, nephews and grandchildren, will rise by €4,000 to €44,000.
- The Category C threshold, which covers all other people benefiting from a gift or inheritance, will rise by €2,000 to €22,000.
Energy
- The restoration of excise on petrol and diesel, due to begin on November 1st, has been postponed to February 28th.
- Reductions in carbon tax on kerosene and natural gas have been announced to €48.50 per tonne. Harris said the rates will remain in place for the lifetime of the Government.
- The fuel allowance will be increased by €5 per week to €43 per week with a higher income threshold for single people over 66 of €641.
Third level
- Across-the-board €150 cut to student fees expected
- Families with more than one child attending third level are expected to see fees fall through expanded grant access.
Childcare
- Families with a young child attending a creche full-time could save as much as €1,000 a year per child through an increased subsidy under the National Childcare Scheme.
State investment scheme
- Simon Harris’s investment scheme will offer tax-free investment options for households in stocks and shares subject to certain limits.
- The limit for contributions will be €12,000 per year, with no tax on funds up to €50,000. Anything over that will be taxed at 1 per cent per annum, regardless of whether the fund makes a profit or loss in a given year.
- Accounts will be available from July, 2027.
Capital gains tax and deemed disposal
- Capital gains tax cut two percentage points to 31 per cent
- A three percentage point fall to 35 per cent in exit tax or “deemed disposal” for holders of existing investment products has been announced.
Cigarettes and vapes
- Excise duty on a box of cigarettes will rise by €1.
- A 20 cent per ml tax on vapes, adding about 40 cent to a small single use disposable vape, has also been announced.
Future Ireland Fund
- An additional €1 billion has been allocated to the Future Ireland Fund.
Rural pubs
- €15 million has been allocated to support rural pubs.
