From income tax cuts to another euro on cigarettes: Here are the main points of Budget 2027

LAST UPDATE | 6 Oct

ANOTHER YEAR, ANOTHER budget.

We have a new finance minister this year in the form of Simon Harris, who delivers his first budget of what will likely be two before he rotates into the role of taoiseach late next year.

Harris has sought to temper expectations for this budget, saying last week that “there’s only so much” one budget can do.

Despite this, people pushed to the pin of their collar are looking for some help from the government and a repeat of last year’s budget when restraint was the order of the day probably won’t cut it.

Below is a list of the most noteworthy measures announced today:

Income Tax

• Entry to higher rate of income tax increases from €44,000 to €46,500.
• Increased entry to the 3% USC band from €28,700 to €30,300.
• The tax-free limit for inheritance tax, known as Capital Acquisitions, is to increase across the various groups.  

Other taxes and credits

• Main tax credits (Personal, Employee, and Earned Income) all increase by €125.
• Rate of Carbon Tax for home heating to decrease from €63.50 to €48.50 per tonne. The rate will remain for the lifetime of the government.
• Tax exemption for residential electricity producers increasing from €400 to €600. 

Social welfare

• €10 increase across weekly social welfare payments.
• A new €500 cost-of-disability payment which the government says will benefit 240,000 people.
• On the means-tested Carer’s Allowance, the means test disregard will increase by €150 to €1,150 with a corresponding increase for a couple to €2,300. 
• An increase in the weekly Fuel Allowance rate by €5 to €43 and an increase in thresholds to avail of it. 
• The Child Support Payment increases by €6 for under both under and over 12s.

Investing

• New State-backed investment scheme to begin in July 2027 with a €50,000 tax-free threshold. 
• The rate of ‘deemed disposal’ tax on investment funds to reduce from 38% to 35%.

Children

• An increase in the tax-free income for childminders of €5,000 to €20,000.
• Monthly cap on childcare fees up to senior infants to reduce to €550 from €735, kicking in next September. 

Housing

• Help-to-buy tax relief for first-time buyers to increase by €5,000 to €35,000. 
• The rent-a-room tax-free allowance is set to increase by €2,000 to €16,000.
• Rent Tax Credit for renters increases from €1,000 to €1,150 for a single person and €2,300 for a couple.

Old reliables

• Excise duty on a pack of 20 cigarettes to increase by €1.
• Duty on e-liquid is also increasing by 20 cents.

Infrastructure and transport

• An extra allocation of €6 billion from 2027 to 2030 to support Metrolink. 
• €208 million will support rural development

Businesses

• Investment of €150 million over three years to support upskilling, including AI.
• A €15 million scheme to support pubs.
• €4 million in funding will be allocated to the League of Ireland football academies.