Budget 2027: What the Changes Mean for Individuals and Businesses

Budget 2027 was announced on 6 October 2026, with a €1.3 billion income tax package at its centre alongside a range of tax and spending measures.

While much of the package focuses on easing household costs, several changes will also affect employees, self-employed individuals, business owners, landlords and investors. Here are the key measures to be aware of.

Budget 2027 at a glance

Measure	Change
20% income tax band (single person)	€44,000 → €46,500
Personal, PAYE and Earned Income tax credits	+€125 each
Employer PRSI lower-rate threshold	€552 → €600 per week
Capital Gains Tax standard rate	33% → 31%
CAT parent-to-child threshold	€400,000 → €420,000
Help to Buy maximum	€30,000 → €35,000
Rent-a-Room tax-free limit	€14,000 → €16,000
Exit tax on funds and life assurance	38% → 35%

Income Tax and USC

The point at which the 40% rate of income tax applies will increase from €44,000 to €46,500 for a single person, with proportionate increases for married couples and civil partners.

The Personal, PAYE and Earned Income tax credits will each increase by €125, and the Home Carer Tax Credit by €100. The ceiling for the 3% USC rate rises by €1,600 to €30,300, which is particularly relevant to lower-paid workers.

The Government estimates that someone earning €50,000 will pay over €700 less in income tax and USC, and a two-income couple earning €100,000 about €1,500 less. The actual benefit will depend on your income, personal circumstances and the credits and reliefs you claim.

Employers and Payroll

The National Minimum Wage will increase from €14.15 to €14.94 per hour from 1 January 2027. Employers should factor this into payroll and staffing budgets, and consider the knock-on pressure to maintain pay differentials for staff already paid above the minimum.

There is some offsetting relief: the employer PRSI threshold rises from €552 to €600 per week, saving roughly €650–€700 a year for each employee below the new threshold.

Two administrative changes are also worth noting. From January, employers can choose to keep reporting payroll to Revenue in real time or move to monthly returns. And Professional Services Withholding Tax will move from a flat 20% to personalised deduction rates, which should help the cash flow of professionals paid by public bodies

Payroll systems and pay rates should be reviewed before the changes take effect.

Capital Gains Tax

The standard rate of Capital Gains Tax is being reduced from 33% to 31%. This is relevant to anyone making taxable gains on assets such as shares, investment property or a business.

For example, a taxable gain of €100,000 would give rise to tax of €31,000 at the new rate, compared with €33,000 before, ignoring any reliefs or exemptions. The final bill will still depend on the asset, the gain and the reliefs available.

If you are considering selling a business, property or other significant asset, taking advice before a sale is agreed can help ensure it is structured as tax-efficiently as possible.

Capital Acquisitions Tax

The tax-free threshold for gifts and inheritances between parents and children rises by €20,000 to €420,000. The Group B threshold (for example, siblings, nieces, nephews and grandchildren) rises to €44,000, and Group C (all others) to €22,000.

For families considering succession planning, this gives more scope to transfer wealth between generations before tax arises. The position also depends on previous gifts and inheritances, the relationship between the parties and the type of transfer, so it is sensible to review it before any transfer takes place.

A New Savings and Investment Account

A new State-backed savings and investment account will be introduced from July 2027 to encourage people to invest. You can contribute up to €12,000 a year, with no minimum.

The first €50,000 of the account's value is tax-free. Above that, a flat 1% tax applies to the excess each year, so an account worth €52,000 would pay just €20. Separately, the exit tax on Irish funds and life assurance products falls from 38% to 35%.

More detailed guidance on eligibility and investment options is expected as the legislation is developed.

Landlords, Homeowners and Buyers

The annual tax-free limit under the Rent-a-Room scheme rises from €14,000 to €16,000, and the scheme will now cover new detached auxiliary dwellings of 32 to 45 square metres.

First-time buyers can claim up to €35,000 under Help to Buy, and the Rent Tax Credit rises by €150 to €1,150 for single claimants and €2,300 for couples.

Owners of derelict property should note that a new Derelict Property Tax at 7% will be included in this year's Finance Bill.

Business Reliefs and Farmers

The R&D tax credit has been made more accessible for smaller companies, including a higher first-year payment threshold (€105,000) and higher limits on subcontracted work. The Employment Investment Incentive, Start-Up Relief for Entrepreneurs, Angel Investor Relief and the corporation tax start-up relief for small companies have all been extended.

For farmers, the tax credit for Succession Farm Partnerships doubles to €10,000 and the three-year holding period is removed. The flat rate addition rises to 4.8%, and the accelerated allowance for farm safety equipment is extended to the end of 2029.

Energy and Fuel Costs

The temporary reductions in fuel excise will stay in full until 28 February 2027, after which normal rates will be restored in four phases by 30 June 2027.

Carbon tax on home heating oil and natural gas will be reduced to €48.50 per tonne and held at that level for the lifetime of the Government.

While these measures do not directly affect tax bills, they could help ease household and business costs in 2027, particularly for businesses that rely heavily on transport or heating.

Other Measures

Budget 2027 also includes a €10 increase in weekly social welfare rates, a cut in maximum childcare fees from €735 to €550 a month, and a permanent €150 reduction in the student contribution fee. While these have no direct tax impact, they may still influence household finances in 2027.

What Does Budget 2027 Mean for Your Business?

For many business owners, the most significant changes are not to Corporation Tax. The minimum wage increase will directly affect payroll costs, partly offset by the higher employer PRSI threshold, while personal tax changes may influence remuneration decisions. Anyone considering selling a business or other assets should take account of the lower Capital Gains Tax rate

As always, the headline announcement is only part of the picture. Many measures require legislation before they take effect, and the detailed rules can matter as much as the headline figures.

What Should You Do Now?

There is no need to make major financial decisions simply because of today's announcements. Instead, consider whether any of the changes affect plans you already have for 2027.

If you are planning to sell an asset, transfer wealth, take on employees, change how you operate your business or make a significant investment, getting advice first can help you understand the tax implications and avoid unexpected outcomes.

At LedgerPlus Accountants, we can help you understand how Budget 2027 affects you, whether you are an employee, self-employed, a landlord, an investor or a business owner. If you would like advice on any of the measures announced, get in touch with our team.

This summary is based on the Budget announcements of 6 October 2026. It is for general information only and does not constitute tax or financial advice. Measures may change as the Finance Bill passes through the Oireachtas.