The 2026 Budget, announced on 7 October 2025, introduces a range of measures affecting personal taxes, property, corporation tax, and incentives for businesses.

Personal Taxes and USC:

Income Tax Bands and Rates: There are no changes to standard tax rates for 2026. However, personal tax credits and income tax bands have increased across the board:

• Single or widowed individuals without children: €44,000 @20%, balance @40%.
• Single individuals eligible for the Single Person Child Carer Credit: €48,000 @20%.
• Married couples or civil partners (both working): €53,000 @20% within the first €35,000, balance @40%.

Universal Social Charge (USC):

• USC thresholds have increased, with the standard top rate of 8% applied to income above €70,044.
• Reduced USC rates of 2% apply to individuals aged 70+ with incomes under €60,000, and full medical card holders under 70 years.

Tax Credits:

• Key credits remain, including the Employee Tax Credit (€1,700 single, €3,400 married), Single Person Child Carer Credit (€1,900), Blind Tax Credit (€1,950 single, €3,900 married), and Home Carer Tax Credit (€1,950).

Rent Tax Credit and Mortgage Interest Relief:

• Rent Tax Credit extended to 2026–2028.
• Mortgage Interest Relief extended to 2026, calculated on the increase in interest paid over 2022 levels.

Benefit-in-Kind (BIK) and Employer Incentives:

• New BIK category for zero-emission cars (A1) with rates of 6–15% of the car’s original market value.
• Temporary reductions to BIK for cars and vans extended through 2026–2028.
• New tax relief for employer-provided electric vehicle charging facilities.

Employment and Business Measures:

• National Minimum Wage: Increases by €0.65 to €14.15 per hour from 1 January 2026.

• Key Employee Engagement Programme (KEEP): Extended to 31 December 2028, supporting employee share schemes.

• Special Assignee Relief Programme (SARP): Extended to 31 December 2030, with minimum income threshold increased to €125,000.

• Foreign Earnings Deduction (FED): Extended to 31 December 2030, with a higher claimable income of €50,000.

Property and Housing:

Help to Buy Scheme:

• Extended to 2029, supporting first-time buyers.

Residential Property Measures:

• New Vacant Homes Tax introduced.
• Increased Residential Property Stamp Duty rates.
• Residential Zoned Land Tax (RZLT) exemptions available for landowners requesting zoning changes.

Residential Development Refund Scheme:

• Extended to 2030 with longer time limits and multi-phase refund options.

Other Property Incentives:

• Living City Initiative extended to 2030, with increased qualifying property age (pre-1975) and expanded locations (Athlone, Drogheda, Dundalk, Letterkenny, Sligo).
• Cap of €200,000 tax relief per project removed for commercial and rented residential premises.

Business and Corporation Tax:

Capital Gains Tax (CGT):

• Enhanced Entrepreneur Relief, lifetime limit increased from €1 million to €1.5 million for disposals of qualifying business assets.

Research & Development (R&D) Tax Credit:

• Rate increased from 30% to 35%, with Year One amount increased to €87,500.

Corporation Tax Measures:

• New exemptions for foreign dividend income.
• Enhanced deductions for eligible construction expenditure, including apartment developments and conversions of non-residential buildings.
• Accelerated capital allowances for energy-efficient equipment and gas vehicles extended to 2030.
• Participation exemptions for certain foreign dividends expanded geographically.

Film and Digital Games Reliefs:

• Film tax credit enhanced for productions with VFX work over €1 million.
• Digital Games Relief extended to 2031 and enhanced for post-release content work.

Balancing Allowances for Intangible Assets: Ring-fencing and 80% cap provisions updated for specified intangible asset disposals.

Farming Measures:

• Accelerated Capital Allowances for Slurry Storage: Extended to 31 December 2029.

• Young Trained Farmer (YTF) Relief, Farm Consolidation Relief, and Farm Restructuring Relief extended to 2029, with scope widened to include commercial and non-commercial woodland.

• Flat-Rate Addition for Farmers: Reduced from 5.1% to 4.5% from 1 January 2026.

VAT, Excise, and Carbon Taxes:

VAT:

• Second reduced rate of 9% extended to gas and electricity supplies until 2030.

• Reduced rate applied to certain apartments, hairdressing services, and hot takeaway food/drink (excluding alcohol).

Excise and Carbon Taxes:

• Tobacco Products Tax increased by €0.50 per 20-cigarette pack.

• Mineral Oil Tax (MOT) and Natural Gas Carbon Tax rates updated to €71 per tonne CO₂.

• Solid Fuel Carbon Tax (SFCT) rates also increased.

Hospitality Sector:

• From 1 July 2026, the VAT rate applied to businesses in food and catering and hairdressing services is being reduced from 13.5% to 9 %.

Vehicle Registration Tax (VRT): Reliefs for electric vehicles extended to 31 December 2026.

Other Highlights

Contact us:

If you have any questions regarding Budget 2026, we’re here to guide and support you. At Gallagher Keane, we provide expert, personalised tax and accounting services. Whether you’re self-employed, running a business, an investor, or have multiple income streams, our team will manage your accounts and tax returns from start to finish — accurately, efficiently, and on time. Get in touch today to make the most of the new measures.