Personal tax - Budget 2026

Universal Social Charge (USC)

The Minister has announced an increase in the 2% USC rate band ceiling by €1,318 to €28,700. This adjustment ensures that full-time workers on the new minimum wage of €14.15 per hour remain outside the higher USC rates.

The USC concession for medical card holders will also continue until 31 December 2027. Under this concession, individuals with a full medical card and annual income of €60,000 or less will continue to benefit from reduced USC rates of 0.5% on the first €12,012 and 2% on the balance. These measures aim to protect lower-income earners and those with medical cards from additional tax burdens.

Rent Tax Credit

The Rent Tax Credit has been extended until 31 December 2028, providing continued relief for tenants. From 2026 onwards, the maximum annual credit will be €1,000 for single individuals and €2,000 for jointly assessed couples. This extension is designed to support households facing sustained rental pressures and to provide certainty for those planning their finances over the medium term.

Mortgage Interest Relief

The Minister confirmed that Mortgage Interest Tax Relief will continue on a tapered basis until 31 December 2026. Eligible homeowners with an outstanding mortgage balance between €80,000 and €500,000 (as of 31 December 2022) can claim relief based on the increase in interest paid compared to 2022. A maximum credit of €1,250 per property will apply for 2025 (claimable in 2026) and €625 per property for 2026 (claimable in 2027).

Micro-Generation of Electricity

The €400 Income Tax exemption for profits from micro-generation of electricity will remain in place until 31 December 2028. This applies to qualifying individuals generating renewable energy for personal use and selling surplus electricity to the grid.   

Retrofitting of property

The Income Tax relief for retrofitting by landlords has been extended for three years to 31 December 2028. The relief can now be claimed in the year the expenditure occurs, and the number of qualifying properties has increased from two to three.

Accelerated Capital Allowances

The following Accelerated Capital Allowances schemes will be extended in Budget 2026:

• Slurry storage facilities: Extended to 31 December 2029, allowing 50% write-off per year over two years, as opposed to seven years for farm buildings and eight years for farm equipment.
• Energy efficient equipment: Extended to 31 December 2030, allowing 100% deduction in year one for qualifying assets.
• Gas vehicles and refuelling equipment: Extended to 31 December 2030, supporting investment in low-emission transport by companies and unincorporated businesses.