Budget 2027 Ireland: What It Could Mean for You

Budget 2027 will be presented by Tánaiste and Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers on Tuesday 6 October 2026. The Government has around €1.5 billion to spend on tax changes. That sounds like a lot, but it won't stretch to everything people are asking for.

So what is realistic, and what could it mean for you? Below we cover the main changes being talked about, what each one could be worth to you, and how likely we think it is. We have also worked through an example for a typical family.

Key Points

• Income tax bands and credits haven't changed since 2025, but wages have kept rising. That means many people are paying a bigger share of their pay in tax.
• The Government's clearest signal is raising the point at which you start paying 40% tax.
• PRSI went up on 1 October 2026 and is due to rise again in October 2027, whatever happens in the Budget.
• For families, bigger tax credits could be worth more than a big jump in the 40% threshold. For single people, it's the other way round.
• The mortgage interest tax credit ends after 2026 unless the Budget extends it.
• Big cuts to capital gains tax and inheritance tax are unlikely this year.

1. Why This Budget Matters

Last year's Budget didn't change income tax bands or credits, so they are the same in 2026 as they were in 2025. Meanwhile, average pay rose by 3.9% over the past year. When your pay goes up but the bands stay put, more of your income ends up taxed at 40%. This is known as fiscal drag, and it's why this year's income tax changes matter more than usual.

PRSI also went up, from 4.2% to 4.35%, on 1 October. Another small increase is due next October. For someone earning €54,400, that next rise will cost about €82 a year.

Here's where things stand for 2026 (our guide to income tax bands and USC rates has the full detail):

• Income tax: you pay 20% tax on income up to €44,000 if you're single, or €53,000 for a married couple with one income (up to €88,000 with two incomes). You pay 40% above that.
• Tax credits: a single employee gets €4,000 in tax credits: a €2,000 personal credit and a €2,000 PAYE credit.
• USC: rates range from 0.5% to 8%, and you pay none if your income is €13,000 or less.
• PRSI: employees pay 4.35%.

2. What Could Change in Your Pay

A Higher 40% Threshold

This is the change most likely to make the headlines. Every €1,000 added to the threshold saves you up to €200 a year, as long as you earn above it. A €2,000 increase would save a single person earning €46,000 or more €400 a year. If you're single and earn under €44,000, it makes no difference to you.

How likely? Likely. The Minister for Finance has said the Government will consider it. Each €1,000 increase costs around €265 million, so a rise of €1,000 to €2,000 is more realistic than the €50,000 threshold some have called for.

Bigger Tax Credits

Tax credits come straight off your tax bill, so an increase helps everyone who pays income tax, not just higher earners. If the personal and PAYE credits each went up by €100, a single employee would save €200 a year.

How likely? Some increase is likely. The Programme for Government commits to increasing credits and bands so that tax doesn't take a bigger real share of your income, as long as the economy stays strong.

USC

Cutting the 3% USC rate to 2.5% would save up to about €207 a year, or €128.50 for someone earning €54,400. It's possible, but it would compete with other income tax changes for the same money.

PRSI

PRSI is going up regardless, and we don't expect the Budget to cut it.

3. What This Could Mean for a Typical Family

Meet Ciara and Mark. They are married with two children and have a mortgage. Mark works full time and earns €54,400, roughly the average wage. Ciara works part time and earns €35,000.

In 2026, they pay €9,535 in income tax and about €1,748 in USC. Their income tax bill already takes off the €625 mortgage interest tax credit they qualify for this year.

Three Possible Budgets

Assuming their pay stays the same:

• A Budget that keeps pace with wages (credits up €80, 40% threshold up €1,760): they save €600 a year, or €11.54 a week.
• A middle Budget (threshold up €2,000, credits up €100): they save €680 a year, or €13.08 a week.
• A big threshold increase only (40% starts at €50,000 for a single person): they save €280 a year, or €5.38 a week.

A cut in the 3% USC rate to 2.5% would save them another €160 a year.

Why is the biggest threshold increase worth the least? Only €1,400 of their income is taxed at 40% today, so raising the threshold further doesn't help them. Bigger credits help every taxpayer.

(We've assumed the married thresholds rise in line with the single threshold, as they have in recent Budgets, and left out other reliefs such as pension contributions.)

The Mortgage Interest Credit Is Due to End

2026 is the last year of the mortgage interest tax credit under current rules, and it is worth up to €625 this year. Unless the Budget extends it, Ciara and Mark lose their €625 credit in 2027. That would wipe out most of the gains above. They would end up €25 a year worse off in the first scenario, €55 better off in the second and €345 worse off in the third.

If They Get a Pay Rise

If they both get a 4% pay rise next year (€3,576 between them) and the bands and credits stay frozen, they keep just 53% of it after tax, USC and PRSI. If the Budget keeps pace with wages, they keep 79%.

Other Households

Here's what the same three Budgets would be worth to two other households on €54,400:

• A single person renting (paying at least €5,000 a year in rent): €512, €600 and €1,200 a year.
• A one-income family (one parent at home with the children): €520, €580 and €280 a year.

Single people gain most from a big increase in the 40% threshold. Families gain more from bigger tax credits.

To see your current take-home pay, try our salary after tax calculator.

4. If You Rent

The rent tax credit is worth 20% of the rent you pay, up to €1,000 a year if you're single or €2,000 for a married couple taxed jointly. It runs until the end of 2028, and the Tánaiste has said he is "positively disposed" to increasing it, so an increase looks likely.

You can also claim it for past years. Claims for 2022 must be made by 31 December 2026, so if you rented in 2022 and haven't claimed, now is the time.

5. If You're Thinking of Selling Shares, Property or a Business

Capital gains tax is charged at 33% on gains above €1,270 a year. Your home is generally exempt.

There have been many calls to cut the rate to 20%. On a €100,000 gain, with no other gains that year, that would cut your tax from €32,581 to €19,746, a saving of €12,835.

How likely? A full cut is unlikely this year, as it would use up most of the money set aside for tax changes. A smaller cut, or a lower rate for business owners, is possible.

Business owners selling a qualifying business already pay 10% on gains, up to a lifetime limit of €1.5 million, under Entrepreneur Relief, and there have been calls to raise that limit.

Our advice: don't rush a sale, or put one off, on the strength of a prediction. Talk to us first.

6. If You Expect an Inheritance or Plan to Give a Gift

Inheritance tax is charged at 33% on anything above your tax-free threshold, which depends on your relationship to the person giving it:

• From a parent: €400,000
• From a brother, sister, aunt, uncle or grandparent: €40,000
• From anyone else: €20,000

For example, a child inheriting a €500,000 home from a parent, with no earlier gifts or inheritances from their parents and no exemptions available, would pay €33,000 in tax today. If the €400,000 threshold went up to €500,000, they would pay nothing.

How likely? A modest increase is possible, as it's relatively cheap: raising the parent threshold to €500,000 would cost about €87 million a year. Bigger changes, like one threshold for everyone, are unlikely this year.

7. Other Changes to Watch For

• Savers: the Government plans to introduce a tax-efficient savings and investment scheme. An announcement is likely, though the detail may come later.
• High earners and the self-employed: there have been calls to cap the top rate at 50% and to scrap the extra 3% USC on non-PAYE income over €100,000. We don't expect either this year.
• Company cars: the €10,000 reduction used to work out the taxable benefit on a company car is due to halve to €5,000 on 1 January 2027. Unless the Budget changes this, most company car drivers will pay more tax next year.
• Investing in small businesses: the tax reliefs for investing in or starting a small business (the Employment Investment Incentive, Start-up Relief for Entrepreneurs and Angel Investor Relief) are all due to end on 31 December 2026. An extension is likely, as the EU rules they are tied to are due to be renewed.

8. What You Can Do Now

You don't need to wait for the Budget to make sure you're paying the right amount of tax.

1. Claim what you missed for 2022 before 31 December 2026. You can generally claim back overpaid tax for the last four years, so the window for 2022 closes at the end of this year. The rent tax credit, home carer credit and medical expenses are often missed.
2. Check the home carer credit. If your spouse or civil partner looks after your children at home and earns €7,200 or less, you may be entitled to up to €1,950 a year.
3. Claim the mortgage interest tax credit for 2026 if you qualify, as this is the last year under current rules.
4. Get advice before a big sale or gift. Talk to us before you act on any Budget speculation.

How Irish Tax Hub can help: once the Budget is announced, we can work out exactly what the changes mean for you, check that you are claiming every credit you are entitled to, and advise you before any sale or gift. If you'd like help, get in touch with us.

Follow Our Budget Day Coverage

On Tuesday 6 October, check back on our website. We will post updates throughout the day as the measures are announced, followed by a full breakdown of what Budget 2027 means for you.