New tax and spending measures take effect
In Budget 2027, the government unveiled an €8.65 billion package of tax and spending measures. Key highlights include adjustments to income tax bands and credits, reduced childcare costs, and the introduction of a state savings and investment account, as detailed by officials.
Some measures began on Wednesday, while additional ones won’t take effect until January or later in 2027. The capital acquisitions tax thresholds for gifts and inheritances received from 7 October onward will be adjusted.
Key Tax Measures
The Group A threshold will increase from €400,000 to €440,000; Group B will rise from €40,000 to €44,000; and Group C from €20,000 to €22,000. Capital gains tax will be reduced from 33% to 31% for disposals on or after 7 October.
Starting September 2027, childcare fees for children up to senior infants will be capped at €550. The employer PRSI threshold climbs from €552 to €600 beginning 1 January.
Other Budget Measures
The rate of excise on petrol and diesel was cut earlier this year, and will be unwound between 28 February and 30 June. The rate of carbon tax for petrol and diesel will increase from €71 to €78.50 per tonne from 1 May.
The Help to Buy Scheme’s maximum tax refund is now €35,000. Rent tax credits will increase by €150 annually, reaching €1,150 for individuals and €2,300 for couples starting January.
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The point at which single workers begin to pay the higher 40% rate of tax on their income will increase from €44,000 to €46,500 from January 2027. Changes to the personal, PAYE and earned income tax credits and the 2% band of USC will also be made in January.
Social Protection Measures
State pension and most weekly social welfare payments rise by €10 from January 2027. Child support will go to €64 weekly for under-12s and €84 for 12+.
Working Family Payment increases by €30 across all family sizes, with Fuel Allowance now at €43 weekly. Starting July 2027, Carer’s Allowance income disregard reaches €1,150 for singles and €2,300 for couples.
A double Christmas payment will be paid to all qualifying social welfare recipients the week of 7 December. Student fees will be cut by €150 and the SUSI maintenance grant will be increased by 4.5% in January.
Families with income below €150,000 and multiple children in college gain expanded grant eligibility starting September. The national minimum wage rises by 79 cents to €14.94 per hour on 1 January.
