Irish Tax Guide 2026
Delivered 7 October 2025
Finance Minister Paschal Donohoe has set the shape of the economic landscape for the coming year with the release of Budget 2026. The €9.4 billion package leans into targeted supports rather than sweeping tax cuts. Framed around steadiness rather than spectacle, Donohoe states that the purpose of the updates is to “invest in our future while securing the jobs, prosperity and stability of today”.
Among the key measures are a new derelict property tax, a reduction in the hospitality VAT rate, and a three-year extension of the rent tax credit. Mortgage relief and renter support continue, while student fees are set for further cuts.
The Government is also allocating €1 billion to a contingency fund to address emerging fiscal demands and prepare for Ireland’s upcoming EU presidency.
Overall, the budget has been framed as ‘sensible’, designed to protect jobs, anchor ourselves, and steer public spending back towards stability and resilience.
Key Announcements from the Budget
- A €10 across-the-board increase to core weekly welfare payments, including the old-age pension.
- A Christmas bonus will be retained.
- Child support payments will increase by €8 for kids under 12 and €16 for those aged 12 and over.
- Eligibility for the fuel allowance will be extended to recipients of working family payments.
- Income thresholds for the Working Family Payments will increase by €60.
- The income disregard for carers’ allowance is to increase to €1,000 for a single person and €2,000 for a couple.
- Increase spending on disabilities by at least €500 million, potentially more than €600 million.
- There will be money for “thousands” more childcare places and a wage increase for those working in the sector.
- The back-to-school clothing and footwear allowance will be extended to two-and-three-year-olds.
- A new DEIS+ scheme for schools with the highest levels of educational disadvantage.
- 860 new special education teachers.
- 1,700 new SNAs.
- New Education Therapy Service to roll out therapy supports directly into special schools.
- Increase in school funding across primary and post-primary schools.
- Help to Buy to be extended.
- Renters’ tax credit to be extended for three years at its current level of €1,000 for an individual or €2,000 for a couple.
- VAT on the sale of new apartments is to be reduced from 13.5% to 9%.
- Exemptions/reductions in corporation tax on profits from the sale of some apartments, including Cost Rental Schemes.
- Mortgage interest tax relief is extended for two years, but reduced for the final year (€1,250 for 2025, €625 for 2026).
- Students’ fees will reduce by €500 to €2,500.
- Income thresholds for SUSI grants will rise by €5,000 to €120,000 per household.
- An increase of over 2c per litre at the fuel pumps.
- The 9% VAT on utility bills will be extended for three years to the end of 2028.
- €588 million for SEAI residential and community energy upgrade schemes, an €89 million increase on last year.
- Increase in the rate per tonne of carbon dioxide emitted for all propellant fuels from €63.50 to €71.
- VAT on food businesses, catering and hairdressing will reduce from 13.5% to 9% from July 2026. This will cost €232 million next year and €681 million in a full year.
- Minimum wage increased by 65c to €14.15 per hour.
- Research and Development tax credits will be overhauled.
- The R&D credit rate will rise from 30% to 35%, and the first-year payment threshold will increase to €87,500 to support smaller projects.
- CGT revisions with entrepreneurial relief reformed with the lifetime limit raised from €1 million to €1.5 million.
- The Special Assignee Relief Programme has been extended for five years, and the minimum qualifying income has been increased to €125,000 p.a.
- Banking levy extended by another year with a target yield of €200 million.
- Reduced public transport fares will be maintained for next year.
- €5,000 VRT relief for EVs extended to the end of 2026.
- BIK for company cars extended on a tapered basis – worth €10,000 next year, €5,000 in 2027, and €2,500 in 2028. It will be abolished in 2029.
- Basic Income for Artists scheme to be retained on a permanent basis, rather than as a pilot scheme
- Section 481 film tax credit will see a new 40% rate of relief for productions with €1 million, up to a maximum of €10 million per production
- The Digital Games tax credit will be extended for six years until the end of 2031
- €10 million more for sports, including €3 million for the FAI’s academy system
- €15 million for An Post
- €33 million for the National Broadband Plan
- The final allocation for health will be €27.3 billion, an increase of €1.5 billion on 2025.
- 300 more staff for mental health services.
- 100 more clinicians for mental health crisis, incl. specialist teams to be placed in model 4 emergency departments out of hours.
- New crisis resolution teams, incl. drop-in crisis cafes, to be established next year.
- Up to 1,000 additional gardaí in 2026.
- More money for body cameras, victim support, youth diversion and domestic violence programmes.
- More spending on resources to speed up immigration processing.
- Increased budget, including more funding for the new TB action plan.
- Excise duty increase of 50 cents on a box of cigarettes, with a pro rata increase on other tobacco products.
- 9% VAT on gas and electricity to 31 December 2030
- 9% VAT on food, catering and hairdressing services from 1 July 2026
- increase in Research and Development Tax Credit to 35%
- 9% VAT on the sale of apartments
- enhanced Corporation Tax Deduction for Apartment Construction Expenses
- expansion and enhancement of the Living City Initiative
- increase in the USC Middle threshold by €1,318
- Decrease in Tax on Certain Investments to 38%
- Extend Rent Tax Credit to 31 December 2028
- increase in the Excise Duty and VAT on a pack of cigarettes by €0.50
- increase in lifetime limit for revised entrepreneur relief to €1.5 million
- extension of the tax deduction for the manufacture of Uilleann Pipes and Irish Harps
Income Tax Rates
| Single or Windowed | 20% tax band @ €44,000 |
| Balance @ 40% | |
| Single or widowed with qualifying Child | 20% tax band @ €48,000 |
| Balance @ 40% | |
| Married or civil partnership (one income) | 20% tax band @ €53,000 |
| Balance @ 40% | |
| Married or civil partnership (two incomes) | 20% tax band @ €53,000 (with an increase of 35,000 max) |
| Balance @ 40% |
| Single/Windowed | 2026 | 2025 |
| € | € | |
| 65 years or over | 18,000 | 18,000 |
| Married Couples | 2026 | 2025 |
| € | € | |
| 65 years or over | 36,000 | 36,000 |
| Tax Credit | 2026 | 2025 |
| € | € | |
| Single person | 2,000 | 2,000 |
| Married or in a civil partnership | 4,000 | 4,000 |
| Employee Tax Credit | 2,000 | 2,000 |
| Earned Income Tax Credit | 2,000 | 2,000 |
| Widowed person or surviving civil partner (without qualifying child) | 2,540 | 2,540 |
| Single person Child Carer Tax Credit | 1,900 | 1,900 |
| Incapacitated Child Credit | 3,800 | 3,800 |
| Widowed Parent | ||
| – Bereaved in 2025 | 3,600 | – |
| – Bereaved in 2024 | 3,150 | 3,600 |
| – Bereaved in 2023 | 2,700 | 3,150 |
| – Bereaved in 2022 | 2,250 | 2,700 |
| – Bereaved in 2021 | 1,800 | 2,250 |
| Blind Tax Credit | ||
| Single person: | 1,950 | 1,950 |
| Married/ civil partnership | ||
| One spouse/civil partner blind: | 1,950 | 1,950 |
| Both spouses/civil partners blind: | 3,900 | 3,900 |
| Age Tax Credit | ||
| Single/windowed/surviving civil partner | 245 | 245 |
| Married/in a civil partnership | 490 | 490 |
| Dependent Relative | 305 | 305 |
| Home Carer Tax Credit | 1,950 | 1,950 |
| 2026 | EMPLOYEE AND SELF EMPLOYED | 2025 | |
| 0% on total earnings <€13,000 per annum | 0% on total earnings <€13,000 per annum | ||
| 0.5% on €0 to €12,012 per annum | 0.5% on €0 to €12,012 per annum | ||
| 2% on €12,013 to €28,700 per annum | 2% on €12,013 to €27,382 per annum | ||
| 3% on €28,701 to €70,044 | 3% on €27,382 to €70,044 | ||
| 8% on €70,045 to €100,000 | 8% on €70,045 to €100,000 | ||
| PAYE INCOME 8% on excess over €100,000 | PAYE INCOME 8% on excess over €100,000 | ||
| SELF EMPLOYED INCOME 11% on excess over €100,000 | SELF EMPLOYED INCOME 11% on excess over €100,000 | ||