Budget 2027: What You Need to Know
Budget 2027 introduces a range of tax and spending measures affecting businesses, individuals and families, with changes across personal taxation, investment, employment costs, housing and the wider cost of living.
The overall Budget package amounts to €8.65 billion, comprising €7 billion in additional spending measures and €1.65 billion in tax measures.
While further detail will follow through the Finance Bill and supporting legislation, we have highlighted some of the measures announced that we believe are particularly relevant to our clients and what they could mean in practice.
At a glance: Budget 2027
These are only some of the measures announced as part of Budget 2027. Further detail will follow through the Finance Bill and supporting legislation.
Income Tax: The Standard Rate Cut-Off Point will increase by €2,500 to €46,500 for a single person.
Tax Credits: The Personal, Employee and Earned Income Tax Credits will each increase by €125 to €2,125.
Capital Gains Tax: The standard CGT rate will reduce from 33% to 31%.
Investment: A new Investment Account will be introduced with a €50,000 tax-free threshold and maximum annual contributions of €12,000.
Employment Costs: The National Minimum Wage will increase to €14.94 per hour, alongside an increase in the Employer PRSI threshold.
Housing: The maximum Help to Buy refund will increase to €35,000, while the Rent Tax Credit will also rise.
These are only some of the measures announced as part of Budget 2027. Further detail and guidance will follow once the Budget documents and subsequent Finance Bill are published.
Income Tax and USC
Budget 2027 includes a €1.3 billion personal income tax package.
The Standard Rate Cut-Off Point will increase by €2,500, from €44,000 to €46,500 for a single person, with proportionate increases for married couples and civil partners.
The Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit will each increase by €125 to €2,125, while the Home Carer Tax Credit will increase by €100.
The entry threshold for the 3% USC band will also increase by €1,600, from €28,700 to €30,300.
According to the Government’s examples, an individual earning €50,000 a year could see their income tax and USC liability reduce by more than €700, while a two-income couple earning €100,000 between them will see a benefit of around €1,500.
The benefit of these changes will ultimately depend on each taxpayer’s income level and personal circumstances.
Key tax and financial measures
Budget 2027 includes a number of tax and financial measures relevant to businesses, employers, investors and individuals when planning for 2027 and beyond.
National Minimum Wage and Employer PRSI
The National Minimum Wage will increase by €0.79 per hour to €14.94.
At the same time, the weekly Employer PRSI threshold will increase from €552 to €600 for 2027.
The Government estimates that this could result in an Employer PRSI saving of approximately €650–€700 per employee below the new weekly threshold over the course of the year.
For employers, the combined impact of these measures should be considered when budgeting for payroll and employment costs in 2027. Businesses may also need to consider whether increases at the minimum wage level create knock-on pressures elsewhere in their pay structures.
Budget 2027 also extends a number of existing investment and start-up reliefs, including the Employment Investment Incentive, Start-Up Capital Incentive, Start-Up Relief for Entrepreneurs and Angel Investor Relief, subject to the relevant EU State Aid framework. The Corporation Tax Small Company Start-Up Relief will also be extended.
A further €3 million has been allocated to establish Start-Up Ireland, a national entrepreneurship initiative intended to act as a single entry point for founders.
Savings and investment
One of the more significant measures announced in Budget 2027 is the introduction of a new Investment Account.
The account will have:
a €50,000 tax-free threshold
a flat annual tax of 1% on the value of the account above €50,000
a maximum annual contribution of €12,000
no minimum annual contribution
The account is expected to open from 1 July 2027.
Capital Gains Tax, dividend withholding tax, investment undertaking tax, life assurance exit tax and deemed disposal will not apply to investments held within the account. Eligible investments will include shares, bonds, ETFs and other funds.
Separately, the tax rate applying to Irish and equivalent offshore funds and certain life assurance products will reduce from 38% to 35% from 1 January 2027.
For investors, these changes may influence how different savings and investment options are considered from 2027 onwards.
Capital Gains Tax
The standard rate of Capital Gains Tax will reduce from 33% to 31%.
The reduction is intended to encourage investment and facilitate the reinvestment of capital by business owners and investors.
Individuals or business owners considering a disposal should consider the timing of transactions and how the new rate interacts with any reliefs that may be available.
Capital Acquisitions Tax
Budget 2027 also increases all three Capital Acquisitions Tax group thresholds:
Group A: €400,000 to €420,000
Group B: €40,000 to €44,000
Group C: €20,000 to €22,000
These thresholds apply to lifetime gifts and inheritances and may be particularly relevant when considering succession and estate arrangements.
“The increase in the CAT thresholds is very welcome and long overdue. For many families, the family home alone now exceeds the Group A threshold, particularly in Dublin and Leinster region."
-Colm Hedderman, Director, Business & Tax Advisory
Property and housing
The maximum refund available under the Help to Buy Scheme will increase by €5,000 to €35,000, with immediate effect.
The Rent Tax Credit will increase to €1,150 for individuals and €2,300 for couples.
The tax-free threshold available under Rent-a-Room Relief will also increase from €14,000 to €16,000.
The relief will be extended to qualifying detached auxiliary dwellings of between 32m² and 45m².
A new Derelict Property Tax of 7% will also be introduced, with the necessary legislation to be included in the Finance Bill.
For homeowners, first-time buyers, landlords and businesses operating within the property sector, the practical impact will depend on individual circumstances and the final legislative detail.
What does Budget 2027 mean for you?
Budget announcements can make the headlines quickly, but understanding how individual measures apply in practice can take time.
For businesses, Budget 2027 may prompt a review of areas including payroll and employment costs, investment decisions, energy expenditure, capital transactions, succession and wider tax strategy.
For individuals, changes to income tax, USC, investment taxation, CAT and housing supports may affect financial decisions during 2027 and beyond.
As further detail is published through the Finance Bill and supporting legislation, it will be important to consider not only the headline announcements but also the conditions, commencement dates and practical operation of individual measures.
“The proposed increase in the 40% income tax threshold to €46,500, alongside increases to key tax credits, should provide additional relief for many taxpayers. For businesses, however, measures such as the increase in the National Minimum Wage will also need to be considered against the backdrop of wider operating and employment costs. The detail behind each measure will ultimately be important in determining its impact in practice.”
Colm Hedderman, Director, Business & Tax Advisory
Explore our full Budget 2027 briefing
This article highlights some of the announcements we believe are particularly relevant to our clients, but Budget 2027 contains a much wider range of measures.
Our dedicated Budget 2027 Briefing brings together the latest announcements, detailed Budget information and additional resources in one place.
How UHY Farrelly Dawe White can help
The impact of Budget 2027 will vary depending on your individual or business circumstances.
If you would like to discuss how any of the measures announced may affect you or your business, our Tax team is available to help you understand the changes and consider the next steps.
The information contained in this article is intended as a general overview of selected Budget 2027 measures and does not constitute tax, legal or financial advice. Individual circumstances should be considered before taking action.
