Personal tax - Budget 2027

Income tax bands

The Minister confirmed an increase in the standard rate band cut-off point by €2,500.  For 2027, the standard rate band cut-off point for taxpayers will be as follows:

• Single, widowed or surviving civil partners - €46,500
• Single, widowed or surviving civil partners, qualifying for the Single Person Child Carer Credit - €50,500
• Married couples or civil partners (one income) - €55,500
• Married couples or civil partners (two incomes) - €55,500 (with an increase of max €37,500)

Tax credits

There will be an increase in income tax credits. The personal tax credit, employee tax credit and earned income tax credit will all increase by €125 to €2,125

The home carer tax credit will increase by €100 to €2,050 in 2027.

Universal Social Charge (USC)

The Minister has announced an increase in the 2% USC rate band ceiling by €1,600 to €30,300. This adjustment ensures that full-time workers on the new minimum wage of €14.94 per hour remain outside the higher USC rates.

Capital Gains Tax

The standard rate of Capital Gains Tax (CGT) is being reduced from 33% to 31%. This reduction applies to disposals made on or after 7 October 2026.

There will be no change to the 33% rate which applies to the disposal of development land.

Capital Acquisitions Tax

There will be an increase to the lifetime group tax free thresholds for gifts or inheritances as follows: 

• Category A Threshold from €400,000 to €420,000
• Category B Threshold from €40,000 to €44,000
• Category C Threshold from €20,000 to €22,000

The increased group thresholds will apply to gifts and inheritances taken on or after 7 October 2026.

There was no change to standard rate of CAT which remains at 33%.

Rent-a-Room Relief

The Rent-a-Room rental income ceiling is being increased from €14,000 to €16,000 from 1 January 2027.

The relief is extended to certain detached auxiliary dwellings which were installed after 27 July 2026 in line with when the changes in planning rules for such dwellings came into force.  This relates to dwellings installed on the property’s grounds which are between 32 and 45 square metres.

Help-to-Buy

The maximum relief available under the Help-to-Buy scheme is being increased by €5,000 from €30,000 to €35,000. The other parameters remain unchanged, including property value. The change will take effect from 7 October 2026

Micro-generation of electricity

The income tax exemption for profits from micro-generation of electricity will increase from €400 to €600.   This applies to qualifying individuals generating renewable energy for personal use and selling surplus electricity to the grid.   

Childcare services income tax relief

The ceiling for Childcare Services Relief income tax exemption is being increased from €15,000 to €20,000 for qualifying childminders caring for children in the childminder’s home.

The limit on the number of children who may be cared for is being removed, subject to compliance with prevailing regulatory requirements.

Third level fees

The tax relief for third level fees is being aligned with the level of the Student Contribution Fee by reducing the amount disregarded to €2,350.

As such, a person may claim 20% tax relief on the Student Contribution Fee paid in respect of a second and subsequent student for cumulative fees in excess of the disregarded amount.

Succession Farm Partnerships Tax Credit

The value of the tax credit for Succession Farm Partnerships (SFPs) is being increased from €5,000 to €10,000. The increased tax credit will be available for SFPs registered from and including 1 January 2027.

The three-year holding period before the succession can take place is being removed. The removal of the three-year holding requirement will apply to all Succession Farm Partnership applications made from and including 1 January 2027 and will not apply to any applications made before that date

Accelerated Capital Allowances for farm safety equipment

The Accelerated Capital Allowances for farm safety equipment, which allows for accelerated capital allowances of 50% per annum for eligible equipment, is being extended by three years until 31 December 2029. Twelve additional items are also being added to the list of the eligible equipment.

Donations of heritage items

The aggregate value limit on all donations of heritage items in any single year is being increased from €8 million to €12 million. Donations under the scheme, give rise to tax relief to the donor of 80% of the value of the donation.