Budget 2027 Ireland: The Key Changes to Tax, Rent, Childcare, Pensions and Energy

Published 6 October 2026. This article reflects the Budget 2027 measures announced in the Dáil today. The detailed supporting tables are still being published, so Compound will reconcile commencement dates and calculator assumptions against the final official documents as they become available.

Budget 2027 has now been unveiled. The package is worth about €8.5 billion, with roughly €1.65 billion allocated to tax reductions. For households, the biggest changes are concentrated in income tax, rent relief, childcare, welfare, housing supports, energy and investment taxation.

Budget 2027 at a glance

• 40% income-tax threshold: rises from €44,000 to €46,500 for a single person.
• Tax credits: the Personal, PAYE and Earned Income credits each rise by €125.
• USC: the 3% band is widened by €1,600 to €30,300.
• Rent Tax Credit: rises to €1,150 for a single renter and €2,300 for a couple.
• Help to Buy: maximum support rises immediately from €30,000 to €35,000.
• State Pension and core welfare: weekly rates rise by €10.
• Childcare: maximum fees for eligible younger children are set to fall from €735 to €550 per month from September 2027.
• Minimum wage: set to rise by 79 cent to €14.94 per hour.
• Inheritance tax: all three CAT tax-free thresholds increase.
• Investing: CGT falls to 31%, exit tax falls to 35%, and a new personal investment account is due from July 2027.

1. Income tax and USC: the main change for workers

The point at which a single worker starts paying the 40% rate of income tax will rise from €44,000 to €46,500.

The Personal Tax Credit, PAYE Tax Credit and Earned Income Tax Credit will each increase by €125. The 3% USC band will also be widened by €1,600 to €30,300.

According to the figures announced with the Budget, a worker earning €50,000 will pay more than €700 less in income tax and USC over a full year.

This is one of the areas where Compound will update its tax calculators once the final Revenue-style commencement tables are fully reconciled.

2. Renters get a larger Rent Tax Credit

The Rent Tax Credit will increase by €150.

That takes the maximum credit to €1,150 for an individual renter and €2,300 for a jointly assessed couple, subject to the normal eligibility rules and sufficient income-tax liability.

For a qualifying single renter who can use the full credit, that is an extra €150 per year compared with the current €1,000 maximum.

See our Rent Tax Credit guide for the underlying eligibility rules.

3. Help to Buy rises to €35,000

The maximum Help to Buy refund for qualifying first-time buyers is being increased by €5,000 to €35,000.

The €500,000 maximum property value remains unchanged. This means the extra support is focused on the size of the available refund rather than widening the price ceiling.

For buyers using the scheme, this is a meaningful increase in the amount potentially available towards a deposit on a qualifying new home.

Read our first-time buyer supports guide for how Help to Buy fits alongside the First Home Scheme and mortgage rules.

4. State Pension, welfare and disability supports

The State Pension and core weekly social-welfare rates will rise by €10 per week.

Other announced measures include:

• a new annual €500 cost-of-disability payment;
• the Carer's Allowance income disregard rising by €150 for a single person and €300 for a couple;
• the Child Support Payment rising by €6;
• the Living Alone Increase rising by €3 per week;
• the Home Carer Tax Credit increasing by €100.

For pensioners, a €10 weekly increase is worth €520 over a full 52-week year before considering any other supports.

5. Childcare: a lower monthly cap, but not until September 2027

One of the biggest household measures is aimed at families with younger children.

From September 2027, the universal National Childcare Scheme hourly subsidy for children up to senior infants is due to rise from €2.14 to €2.50. The maximum monthly fee for eligible children in full-time childcare will fall from €735 to €550.

The Government says the new cap can save a family around €2,220 per child per year in a full-time childcare scenario.

The income threshold for the maximum childcare subsidy is also due to rise from €34,000 to €38,500.

For childminders, the Childcare Services Relief tax exemption rises from €15,000 to €20,000, while the limit on the number of children that can be cared for under the relief is being removed.

6. Energy and fuel: relief continues, but it is targeted

The planned restoration of petrol and diesel excise from 1 November has been postponed. Restoration is now scheduled to begin from the end of February and proceed in phases, with full restoration not due until 30 June 2027.

The carbon-tax rate applying to kerosene and natural gas is being reduced to €48.50 per tonne, with the Government saying those rates will remain in place for its lifetime.

The Fuel Allowance rises by €5 per week to €43, alongside a higher income threshold for qualifying single people aged over 66.

No additional electricity credit was announced. For a practical explanation of the €400 proposal, worked winter bills and decisions about tariffs and solar, see our Budget 2027 winter electricity-cost guide, Electricity Cost Calculator and Solar Payback Calculator.

Separately, €654.5 million has been allocated to SEAI residential and community energy-upgrade schemes.

7. Minimum wage rises to €14.94 per hour

The national minimum wage is set to increase by 79 cent per hour, from €14.15 to €14.94.

For someone working 39 hours a week, the gross increase is about €30.81 per week, or roughly €1,602 per year before income tax, USC and PRSI.

The USC change is important here because it reduces the risk that part of the minimum-wage increase is immediately absorbed by moving more income into a higher USC band.

8. Investing gets some of the Budget's biggest structural changes

Budget 2027 contains unusually significant changes for investors.

The standard Capital Gains Tax rate is being cut by two percentage points, from 33% to 31%.

The exit-tax rate applying to many existing investment products is also being reduced by three percentage points to 35%.

The new Irish Investment Account is due to open on 1 July 2027. The announced framework allows contributions of up to €12,000 per year, with no minimum contribution.

The first €50,000 of relevant account value is below the PIA annual-tax threshold. Above that threshold, a flat annual tax of 1% applies to the portion of the account value above €50,000. For example, an account with a relevant average value of €100,000 would have €50,000 above the threshold, implying a €500 annual account tax under the announced structure.

For the full rules, worked examples, ETFs and shares, provider questions and an interactive tax calculator, read our Personal Investment Account Ireland (PIA) guide.

Investments held inside the account are intended to sit outside the taxes that normally apply to different investment products: no Capital Gains Tax, dividend withholding tax, Investment Undertaking Tax or Life Assurance Exit Tax will apply inside the account, and the deemed-disposal rule will not apply. The provider, rather than the investor, is expected to handle the normal tax administration.

This does not mean providers must charge zero management fees. Platform, dealing and fund charges will still depend on the provider and products chosen. The legislation and final provider terms will therefore matter when comparing the account with pensions and ordinary taxable investing.

9. Inheritance tax thresholds all increase

The three Capital Acquisitions Tax thresholds are being increased:

• Group A: €400,000 → €420,000.
• Group B: €40,000 → €44,000.
• Group C: €20,000 → €22,000.

The CAT rate itself remains separate from these thresholds; the practical effect is that a larger amount can pass tax-free before CAT becomes payable.

Compound's inheritance tax guide explains how the relationship groups work.

10. Rent-a-Room, college fees and electric vehicles

The Rent-a-Room Relief threshold will rise to €16,000 and is being extended to include qualifying newly installed detached auxiliary dwellings.

The annual student contribution charge is being reduced by €150 to €2,350, with additional changes aimed at families with more than one child in third-level education.

For motorists, VRT relief for electric vehicles is being extended for another two years to 31 December 2028. VRT rates on more polluting cars in bands 3 to 20 are set to rise by one percentage point.

So who gains most from Budget 2027?

There is no single answer because the package works through several different channels.

A worker around the higher-rate tax threshold benefits mainly through income tax and USC. A renter can add the larger Rent Tax Credit. Parents with younger children may eventually see a much bigger effect from childcare, although the main fee changes do not begin until September 2027. Pensioners and welfare recipients receive the €10 weekly increase, while first-time buyers can potentially access another €5,000 through Help to Buy.

For investors, the CGT, exit-tax and new investment-account changes could be more important over the long term than the immediate cost-of-living measures.

What Compound is updating next

We have already mapped the Compound articles and calculators affected by Budget 2027. The next step is to reconcile the final official tables and commencement dates before changing calculator logic.

That means we will update the relevant tax, USC, Rent Tax Credit, Help to Buy, inheritance-tax, childcare and investment pages without overwriting historical 2026 rules. Existing URLs that have built up search visibility will be preserved wherever the page is evergreen.

This page will remain our main Budget 2027 household guide and will be updated as the final supporting documents are published.

Compound provides general information, not personal tax or financial advice. Eligibility and tax outcomes depend on individual circumstances and the final legislation and Revenue guidance.