A series of measures including an increase to the minimum wage agreed as part of last October’s budget will take effect from Thursday.
Cuts in VAT and increased public spending in a range of areas left no room in the budget for a repeat of recent cash sums to middle-income workers.
Many people who benefited by €2,000 to €3,000 in the previous year’s budget from tax changes and “one-off” cash disbursements saw no benefit from the package of measures announced by the Government in October.
However, reductions in VAT for the hospitality industry, on energy and on new apartment sales were unveiled.
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There was increased spending on disability, social protection, health and other areas. Additional tax measures designed to promote home building were also announced.
Overall spending increased substantially, by €9.4 billion, bringing total voted spending for the coming year to €117 billion, of which €19 billion will be spent on infrastructure projects.
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As of Thursday, the national minimum wage increased by 65 cent to €14.15 per hour. In parallel, the ceiling for the 2 per cent Universal Social Charge (USC) rate band increased by €1,318 to €28,700.
This rise will ensure that full-time workers on the minimum wage will remain outside the top rates of USC, while also giving a modest benefit to all workers whose income is above that amount.
The USC concession that applies to those who have a full medical card and earn less than €60,000 per year is also extended so that the reduced rate of USC will continue to apply for a further two years until the end of 2027.
The extension of the Rent Tax Credit to the tax years 2026, 2027 and 2028 is effective from Thursday. The credit is valued at €1,000 for a single person and €2,000 for a jointly assessed couple.
Budget 2026 extended the Mortgage Interest Tax Relief, on a tapered basis, for two further years to December 31st, 2026. Available to claim from early 2026, the relief applies in respect of the increase in interest paid in the tax year 2025 over 2022, with a maximum tax credit of €1,250 per property available.
The relief will also be available for the increase in interest paid in the tax year 2026 over 2022, with a maximum tax credit of €625 per property applicable. This relief can be claimed by taxpayers from 2027.
[ Budget 2026: Everything you need to knowOpens in new window ]
From Thursday, the tables used to calculate benefit-in-kind (BIK) liability on employer-provided cars incorporate a new category for vehicles with zero emissions.
The new A1 category introduces reduced BIK rates for electric vehicles, with rates of 6 to 15 per cent, depending on business mileage.
Finally, the Vehicle Registration Tax relief for electric vehicles, which was due to end on Thursday, has been extended by one year.
