Budget 2027 has been unveiled.
The €8.5 billion package, €1.65 billion of which will allow for tax reductions, was announced in the Dáil by Simon Harris and Jack Chambers.
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.
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Income tax
An income tax package of €1.3 billion has been announced.
- Level at which workers enter 40 per cent income tax rate increased from the current €44,000 for a single person to €46,500
- Personal tax credit, PAYE and earned income credit to increase by €125
- 2 per cent band of USC increased by €1,600 to €30,300
Harris said the changes, which will come into effect from January, would see workers earning €50,000 a year paying more than €700 less in income tax and USC.
Minimum wage
- 79 cent increase in the minimum wage, which will bring the current rate to €14.94 per hour from January 1st
Social welfare, disability supports and carers
- €10 increase to weekly social welfare rates to benefit about 1.6 million people, including pensioners, jobseekers, carers and disability scheme recipients. To come into effect in January
- An annual cost-of-disability payment of €500. Payment to be made in the first quarter of 2027.
- Income disregard for carer’s allowance to rise by €150 for a single person and €300 for a couple from July 2027
- The child support payment to rise by €6 while the living alone allowance to rise by €3 per week from January
- Working-family-payment weekly income thresholds to increase by €30 from January
- Home carer tax credit increased by €100 from January
First-time buyers, 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). Increase comes into effect on October 7th.
- Rent tax credit will rise by €150 to €1,150 for single renters and to €2,300 for couples from January.
- Tax-free threshold for earnings under the rent-a-room relief will rise to €16,000 from January and will be extended to include newly installed detached auxiliary dwellings
The three inheritance tax thresholds have been increased. The changes will apply to gifts and inheritances taken from October 7th.
- 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
Housing
Some €9.4 billion has been allocated for housing in 2027, including:
- €2.2 billion to support social housing needs of 110,000 households and investment in emergency supports for those facing homelessness
- €3 billion to fund social housing delivery including 11,250 new build social homes
- €225 million allocated to the Housing Infrastructure Investment Fund
Energy
- The restoration of excise on petrol and diesel, due to begin on November 1st, has been postponed to February 28th
- “Gradual and responsible” restoration of excise thereafter in four phases, with a full restoration “not occurring until 30 June 2027″
- Reductions in carbon tax on kerosene and natural gas have been announced to €48.50 per tonne. Harris said the rates would remain in place for the lifetime of the Government
- The fuel allowance will be increased by €5 per week to €43 per week from this season with a higher income threshold for single people over 66 of €641
Education
- Increase of €17 million to the capitation funding paid to schools to support running costs in 2027.
- Additional €2 million to support Deis Plus programme and €3 million for additional 100 home school community liaison co-ordinators
- €56 million for additional 2,339 special needs assistants and additional 1,353 teachers in 2027
Third level
- Across-the-board €150 permanent cut to student fees from January. Students who have already paid in full will receive a €150 refund
- Families with an income of below €150,000 and more than one child attending college to see fees fall through expanded grant access from September 2027
- Increase of Susi maintenance grant rates by 4.5 per cent from January
- Disregard for the income tax relief for fees to be aligned with Student Contribution rate, which will “give a further saving to parents”
- Further funding for over 1,420 additional higher education places in key health and social care professions and to expand apprenticeship delivery
Childcare
- Maximum childcare fees to be reduced from €735 to €550 for children up to senior infants from September 2027
- 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 from September 2027
- Childcare Services Relief tax exemption to increase by €5,000 to €20,000
Climate
- Vehicle registration tax (VRT) relief for electric vehicles extended for another two years until December 31st, 2028
- VRT rates increasing by 1 per cent on ‘more pollutant cars’ in bands 3 to 20 from January
- €654.5 million for SEAI residential and community energy upgrade schemes
- €170 million allocated to climate action and the environment
Infrastructure
- €2.3 billion allocated to Uisce Éireann, €1.5 billion of which will be used to build capacity and increase resilience
- Additional €6 billion to progress MetroLink from 2027 to 2030, a project of “unprecedented scale in our country”, Chambers said
Health
Additional €1.6 billion allocated to Department of Health for 2027, including for:
- Increase in HSE pay budget
- Reform of GP services, including better access to GP out-of-hours services
- Better access to dental and orthodontic care for children
- Expansions in access to free contraception, providing eligibility to people aged up to 37
Justice
Some €5.9 billion allocated to the Department of Justice will include:
- Additional funding for recruitment of up to 1,000 trainee gardaí
- €77 million for Irish Prisons Service to “respond to demand”
Defence
Some €1.6 billion has been allocated to the Department of Defence, an increase of almost 9 per cent, including for:
- Intake of 850 new permanent members of the Defence Forces next year
- Increases for Air Corps and Naval Service equipment
- National preparedness and resilience funding
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. Reduction applies for disposals made after October 7th
- A three percentage point fall to 35 per cent in exit tax or “deemed disposal” for holders of existing investment products will come into effect from January
Cigarettes, vapes, bank levy
- Excise duty on a box of cigarettes will rise by €1 from October 7th
- A 20 cent tax per ml of vape e-liquid, exclusive of VAT, comes into effect from January 1st
- Bank levy extended for a further year with target yield of €200 million
Future Ireland Fund
Harris said the Government expects to run a surplus of €6.7 billion this year and €9.5 billion in 2027.
- Additional €1 billion allocated to the Future Ireland Fund
Rural pubs
- €15 million has been allocated to support rural pubs next year
Enterprise
- €1 billion investment programme aimed at creating “next generation of large Irish companies”
Some of the €1.4 billion allocated to the Department of Enterprise will include:
- €3 million to enable Enterprise Ireland to establish Startup Ireland, a “national entrepreneurship initiative and single-entry point for founders”
- Funding to provide the National Artificial Intelligence Office with a “strong foundation to implement the AI Act”
- To expand “high-value overseas tourism, extend the tourism season and increase regional visitor numbers”
Agriculture
- Fuel Income Support Scheme for farmers and agricultural contractors and related horticulture and fisheries schemes extended to cover a further five-month period this year at a cost of €31.2 million
- €31 million for a new fertiliser scheme, to be launched this year to support farmers in responding to higher fertiliser costs
- Additional €20 million for fisheries sector
Gaeltacht communities
- €161 million to support Gaeltacht communities, strengthen the Irish language and to improve services and transport links for inhabitants of the islands.
- €1 million will be allocated for people in the Gaeltacht to develop and retain their Irish language skills.
Sports
Some €121 million in current funding has been allocated for Sport Ireland to support sports participation and player development and will include:
- Almost €22 million to support Ireland’s hosting of the 2027 Ryder Cup and preparations for the 2028 European Football Championship
- Additional support for high-performance in the build up to the Los Angeles Olympics in 2028
Arts
- €34.4 million to provide a full year of income support for artists
- Almost €89 million to support national cultural institutions
Do you have questions on what Budget 2027 means for you? The Irish Times has an expert team on hand to answer your queries. You can submit your question in the form below. Questions will be answered in our Budget Q&A going live on Wednesday, October 7th.
