Budget 2026 Highlights

nicolamernagh0
Oct 7
2 min read

The Minister for Finance and Minister for Public Expenditure, Infrastructure, Public Services, Reform and Digitalisation delivered Budget 2026 this afternoon, outlining a package aimed at supporting housing delivery, easing pressure on the hospitality sector, and maintaining stability in the business tax environment. While many measures were anticipated, one unexpected development takes effect immediately.

Budget 2026 balances fiscal prudence with targeted stimulus. Housing supply, cost-of-living supports, and competitiveness in key domestic industries remain the central focus. The total tax package is modest in scope, reflecting limited fiscal headroom, but several measures will have meaningful sectoral impact.

VAT on New Apartments – Immediate Implementation

In a surprise move, the Government has reduced VAT on the sale of new apartments from 13.5% to 9%, effective from midnight tonight.

The measure applies to completed new apartments and is designed to enhance project viability and accelerate supply.
It will remain in place until 31 December 2030.
Developers and purchasers should review pricing and cashflow implications immediately, and ensure qualifying conditions (such as commencement dates) are satisfied.

This is a notable and immediate intervention introduced without prior notice, and signals continued focus on supporting apartment delivery in urban centres.

Hospitality Sector VAT

The Budget confirms a reduction in VAT for restaurants, cafés and catering services, and hairdressers back to 9%, to apply from 1 July 2026.

The change will not extend to hotel accommodation, which remains at the current rate.
The Government frames this as a competitiveness measure to support a labour-intensive sector facing high energy and wage costs.

Operators should plan for the transition, adjusting systems and pricing in advance of the rate change.

Entrepreneurial Relief

One of the welcome enhancements in Budget 2026 is the increase in the lifetime gains cap for the Entrepreneurial Relief regime (i.e. the reduced 10% CGT rate on qualifying disposals). From 1 January 2026, the lifetime limit is rising from €1.0 million to €1.5 million.

This change gives business owners and entrepreneurs additional headroom when planning exits, sales or succession events.

Budget 2026 delivers targeted, rather than broad, reliefs, with a strong housing and hospitality focus. The immediate VAT reduction on apartments represents the most significant and time-sensitive change, while hospitality VAT relief provides medium-term support. Entrepreneurial Relief sees a modest but welcome enhancement, with the lifetime gains limit increased from €1 million to €1.5 million from 1 January 2026, offering greater flexibility for business owners planning an exit.