Budget 2027: Key Tax Changes Explained
Finance Minister Simon Harris delivered Budget 2027 today, 6th October 2026, with a personal tax package worth €1.3 billion. The headline is simple: more of your pay stays in your pocket, renters get a bigger credit, and there is good news for business owners and families planning an inheritance.
Here is what has been confirmed, what it means in euro terms, and where it could matter for you or your business. You can read the Minister's full statement on gov.ie.
Income tax: a higher entry point to the 40% rate
The standard rate cut-off point rises by €2,500, from €44,000 to €46,500 for a single person, with proportionate increases for married couples and civil partners. That means you pay 20% on more of your income before the 40% rate applies.
The main tax credits also go up by €125 each. That covers the Personal, Employee (PAYE) and Earned Income credits, bringing each to €2,125. The Home Carer Tax Credit rises by €100.
The Universal Social Charge (USC) gets a small adjustment too. The entry threshold for the 3% band moves up by €1,600, from €28,700 to €30,300.
Put together, the Government says someone earning €50,000 will pay over €700 less in income tax and USC. A couple with two incomes totalling €100,000 will be €1,500 better off.
Those figures are the Government's headline examples. Your own saving will depend on your income, whether you are PAYE or self-employed, and whether you are single or jointly assessed. If you are paid through a mix of salary and dividends, or you have rental income on top of a job, the picture can look quite different, so it is worth running the numbers.
Inheritance and gift tax: higher CAT thresholds
Capital Acquisition Tax (CAT) thresholds, which apply to gifts and inheritances, are going up across the board. The Group A threshold, covering gifts and inheritances from a parent to a child, rises from €400,000 to €420,000. Group B (such as siblings, nieces and nephews) goes from €40,000 to €44,000, and Group C (everyone else) from €20,000 to €22,000.
Property prices mean many families now sit close to these limits. If you are thinking about gifting while you are alive, or putting a will in order, it is worth revisiting your plans. We cover the rules in more detail in our guide to inheritance tax and CAT thresholds.
Renters and landlords
The Rent Tax Credit increases by €150 to €1,150 for a single claimant and €2,300 for a couple. If you pay rent for your main home and have not claimed, you can still check the qualifying conditions and how to claim on Revenue's website.
For homeowners with a spare room, the Rent-a-Room tax-free threshold rises from €14,000 to €16,000 a year. The relief is also being extended to newly installed detached auxiliary dwellings of between 32 and 45 square metres, such as a garden cabin. This applies retrospectively from 27th July 2026, when the new planning rules came into force.
If you build a garden unit or let a room, keep good records of what you charge and when. The details of the extended relief will be set out in the Finance Bill, so check that your arrangement qualifies before you sign any tenancy.
Self-employed and small business owners
If you are self-employed, the Earned Income Credit rises by the same €125, so your income tax bill falls in line with PAYE workers. You may also benefit from the higher cut-off point as your profits grow.
If you employ staff, the employer PRSI threshold increases from €552 to €600 per week for 2027. The Government says this saves between €650 and €700 per employee a year for those below the threshold. It is designed to soften the blow of the rise in the minimum wage, which goes up by 79 cent.
Business owners and investors also get a cut in the standard rate of Capital Gains Tax, from 33% to 31%. The Employment Investment Incentive, Start-Up Capital Incentive, Start-Up Relief for Entrepreneurs and Angel Investor Relief are all being extended, subject to the adoption of the new EU State aid General Block Exemption Regulation. If you are planning to sell a business or an asset, timing and structure matter more than ever.
Other measures worth knowing about
First-time buyers can now claim up to €35,000 under Help to Buy, an increase of €5,000 with immediate effect.
A new Irish Investment Account is being introduced from 1st July 2027, with an annual contribution limit of €12,000. Carbon tax on home heating oil and gas is also being reduced. Weekly State Pension and core social welfare payments go up by €10, and the Government has confirmed support for workers through MyFutureFund, the new auto-enrolment pension. The Standard Fund Threshold valuation factors are being revised from 1st January 2027, which is relevant if you hold a large pension.
The finer detail, including start dates for some measures, will follow in the Finance Bill. For a plain-English summary of how it applies to you, see Citizens Information.
How we can help
A budget is only useful if you know what to do with it. Whether it is adjusting your salary and dividends, reviewing a gift or inheritance plan, or working out your Rent-a-Room position, we can give you advice based on your own figures.
If you would like to talk it through, get in touch with the Bond & Co. team and we will help you make the most of Budget 2027.