Budget 2026 details were announced in the Dáil by the Minister for Finance on 7th October 2026.
The key points are:
• Income Tax 2026:
• No increase in the standard rate band; this will pitch more taxpayers into higher rate as the year progresses
• No increase in personal tax credits.
• USC in 2026:
• There will be a small increase in the 2% band from €27,382 to €28,700, with a corresponding reduction in the 3% band.
• Capital Acquisitions Tax:
• The Thresholds were not increased and so will remain at their present levels; Class A €400,000, Class B €40,000., Class C €20,000.
• Private Pensions:
• The current €2m Standard Fund Threshold will increase in stages from 2026 to reach €2.8m by 2029; this was provided for in last year’s Finance Act 2024.
o 2025 €2,000,000
o 2026 €2,200,000
o 2027 €2,400,000
o 2028 €2,600,000
o 2029 €2,800,000
• No changes in pension tax relief announced.
• Some changes in Auto Enrolment Scheme taxation will be introduced in Finance Bill 2025 to be published in mid-October 2025, in particular to address the anomaly of the initial AE legislation which seemed to tax AE death benefit payouts under PAYE. The Bill will also ensure that employer contributions to the AE scheme will be exempt from USC for the employee.
• Savings & investments:
• The life assurance exit tax rate, and the rate applying to realised gains on domestic and foreign collective investment funds, will be reduced from 41% to 38%. However, we will have to wait for Finance Bill 2025 to be clear as to when the reduced tax rate will apply from, e.g. from publication of Finance Bill 2025 or from 1st January 2026?
• The Minister also indicated that he will publish a “roadmap early next year, setting out my intended approach to simplify and adapt the tax framework to encourage retail investment. It will take into account the European Commission’s recommendation on Savings and Investment Accounts.”
• The current 1% Stamp Duty rate applied to purchase of shares listed will not apply where the market capitalisation of the company is less than €1bn; this will apply to end of 2030. Again, it is unclear at this stage when this change will apply from? This may encourage more direct investment in shares of Irish registered SMEs and startups listed on regulated markets.
• No change announced in 1% life assurance premium levy.
• Social Welfare benefits:
• A €10 pw increase in the maximum rate of State Pension and other Social Welfare benefits were announced for 2026, with proportionate increases for qualified adults and those on reduced rates of payment and increases in the qualified child increases.
• There will be a double Christmas payment, including the State Pension, in early December 2025.
• Property related reliefs:
• The extension of a number of existing property related reliefs and introduction of new ones was announced in the Budget speech:
• The Rent Tax Credit for income tax is extended for 3 years to end of 2028. It is a maximum of €1,000 per single individual and €2,000 per jointly assessed couple.
• The Mortgage Interest Tax Relief for income tax is extended to end of 2027, but with a reduced relief applying in 2027.
o Homeowners with an outstanding mortgage balance between €80,000 and €500,000 as of 31 December 2022 will be eligible for this relief.
o The current level of relief will be maintained for 2026 of the increase in interest paid in the tax year 2025 over 2022, with a maximum tax credit of €1,250 per property available.
o A reduced level of relief will be available in 2027 for the increase in interest paid in the tax year 2026 over 2022, with a maximum tax credit of €625 per property applicable.
• The Help to Buy scheme for first time buyers continues to 31 December 2029
• Derelict Property Tax:
• It is planned to introduce possibly in 2027 or 2028 a new Derelict Property Tax (DPT) to replace the current Derelict Sites Levy, at a rate no less than 7% of the land market value. The DPT will be collected by the Revenue Commissioners. In the meantime the Derelict Property Tax continues.
• USC does not apply to State Pensions, but does apply to private pensions and ARF/vested PRSA withdrawals
• Exemption from USC applies where total income (excluding the State Pension) in 2026 is less than €13,000.
• The self-employed additional 3% USC surcharge on non-PAYE incomes over €100,000 continues to apply for 2026.
• A 2% USC rate for those over 70 and medical card holders for total income (excluding the State Pension) in excess of €12,012 and under €60,000 continues to apply for 2026.
• *Exemption from USC where income less than €13,000
• There will be a double weekly payment of the State Pension in early December 2025.
• * Means tested
Further changes could happen in the Bills to be published:
• The Finance Bill 2025 which will implement the Budget 2026 changes and other measures will be published around the middle of October 2025. It’s possible that other taxation changes not announced in the Budget could be introduced in the Bill at that stage.
• Some relevant changes, not announced in Budget 2026 speech, could be introduced in the Finance Bill 2025 to be published in mid-October 2025, and in the Social Welfare & Pensions Bill 2025 also expected to be published in October 2025.
For a more in depth budget update from Brokers Ireland please click the following link:
Should you wish to discuss any of the points in detail, please do not hesitate to contact a member of the team today on 01 4972544 or alternatively email info@hegarty.ie
