The 2026 Budget has been released, outlining the Government’s plans for taxation, spending, and investment. But what could it mean for you, your family, and your business? We have compiled a summary that focuses on the practical implications of these changes and how they may affect everyday finances and future planning.
In this special update, we provide a straightforward overview of the main points from Budget 2026.
Our aim is to help you cut through the headlines, understand the practical implications, and identify any opportunities or areas where planning may be required.
As has been widely commented, the emphasis of Budget 2026 has primarily been on expenditure measures, with very limited impact for individual tax payers and companies.
Income Tax & Capital Gains Tax
USC - The 2% band for USC will increase by €1,318, bringing the threshold to €28,700.
Rental Tax Credit has been extended until the end of 2028. The credit remains at €1,000 per individual.
Mortgage Interest Tax Credit has been extended for a further two years, with a “reduced value” provided for in the final year.
Minimum Wage - Effective from 1 January 2026, the Minimum Wage will increase by €0.65 to €14.15 per hour.
Special Assignee Relief Programme (SARP) extended for five years. The minimum qualifying salary increases to €125,000.
Foreign Earnings Deduction (FED) relief increased to €50,000 from 2026, extended for a further five years and the scope has been widened to include Philippines and Turkey.
Electric Vehicles - BIK The €10,000 BIK exemption for company cars is extended for one year. It will reduce to €5,000 in 2027 and €2,500 in 2028, and be abolished in 2029. A new vehicle category for zero emission cars will apply with BIK rates of between 6-15% from 2026. From 1 January 2026, the lower threshold of the highest mileage band for company car BIK will be permanently reduced from 52,001km to 48,001km.
Entrepreneur Relief - The lifetime limit for qualifying gains under the Revised Entrepreneur Relief will increase from €1m to €1.5m for disposals made on or after 1 January 2026.
Offshore Funds and Foreign Life Assurance - The tax rate applicable to Irish and equivalent offshore funds and foreign life assurance products will be reduced from 41% to 38%.
Business Taxation
VAT
From 1 July 2026, the VAT rate for food, catering, and hairdressing services will reduce from 13.5% to 9%.
Effective 8 October 2025, the VAT rate on the sale of completed apartments will also reduce from 13.5% to 9%.
Research & Development (R&D) - The R&D tax credit % will increase from 30% to 35%. The threshold for first-year refunds under the R&D tax credit scheme will increase to €87,500 to support smaller projects.
Key Employee Engagement Programme (KEEP) - extended until the end of 2028.
Accelerated Capital Allowances - The scheme for energy efficient equipment is extended until 31 December 2030.
Digital Games Tax Credit - Extended for six years to the end of 2031.
Film Tax Credit - Enhanced to provide a 40% relief rate for productions with a minimum eligible visual effects work expenditure of €1 million (capped at €10 million per production) and is subject to State approval.
Property Measures
Property Landlords - Retrofitting income tax relief for retrofitting by landlords has been extended to 31 December 2028. The number of qualifying properties has increased from two to three.
The Living City Initiative is being extended to 31 December 2030 and the relief increased from €200,000 to €300,000. The scheme is also being extended to cover certain residential properties built before 1975 and the conversion of certain commercial property and “over the shop” premises.
An Enhanced Corporation Tax Deduction - A new 125% deduction for qualifying apartment construction costs, capped at €50,000 per unit. Applicable to developments of 10+ units with commencement orders submitted between 8 October 2025 and 31 December 2030.
A New Derelict Property Tax (DPT) is to be introduced expected to be effective from 2027 to replace the existing Derelict Sites Levy (DSL). It is expected that the rate of the DPT will not be lower than the existing 7% DSL rate.
Stamp Duty & Other Measures
Stamp Duty - Introduction of a new exemption from 1% stamp duty on the acquisition of shares in Irish companies admitted for trading on certain regulated markets where the company has a market capitalisation of below €1 billion.
Further and higher education From 1 January, the annual student contribution fee will decrease from €3,000 to €2,500. The income threshold to qualify for SUSI student grants has been increased to €120,000.
Further and Higher Education - From 1 January 2026, the annual student contribution fee will fall from €3,000 to €2,500, applying to the current academic year for all eligible students.
VRT Extension of €5,000 VRT relief for electric vehicles extended to 31 December 2026.
Electronic Invoicing to be introduced on a phased in basis in relation to certain “Business to Business” transactions with further details to be published on October 8.
As more details and clarifications emerge in the coming days, we will continue to monitor developments closely. If you would like to discuss how any of the measures in Budget 2026 may affect your personal or business circumstances, please get in touch with our team.
