Budget 2027 has introduced a range of proposed tax changes that could affect individuals, business owners, employers, investors and families planning for the future.

Among the headline announcements are a reduction in the standard Capital Gains Tax rate, adjustments to income tax thresholds and credits, changes to property-related reliefs, and measures designed to simplify certain business tax obligations.

There are also developments for farmers, start-ups and companies investing in research and development.

Below, we outline the main announcements and explain what they could mean in practice.

1. Employment and Payroll

National Minimum Wage

The National Minimum Wage is set to increase to €14.94 per hour. Employers should review their payroll arrangements and consider the potential impact on staffing costs and overall remuneration.

Employer PRSI

The threshold at which the higher rate of Employer PRSI applies is due to increase from €552 to €600.

This change is intended to help employers manage the additional costs associated with the minimum wage increase. The actual benefit will depend on the wages paid to individual employees.

Businesses should assess the combined effect of these changes when preparing their employment budgets for 2027.

Reporting Employee Expenses and Benefits

From January 2027, employers are expected to have the option of submitting Enhanced Reporting Requirements (ERR) returns monthly or continuing with reporting in real time.

The reporting rules cover certain tax-free payments and benefits, including travel and subsistence expenses, small benefits and remote-working allowances.

Until the revised arrangements take effect, employers should continue to meet the existing reporting requirements.

2. Capital Gains Tax

The standard Capital Gains Tax (CGT) rate is set to fall from 33% to 31% for disposals made on or after 7 October 2026.

For taxpayers selling assets at a gain, this could result in a lower tax liability, subject to the applicable rules, exemptions and reliefs.

For example, where an individual has €100,000 in taxable gains subject to the standard rate, the tax liability would decrease from €33,000 to €31,000. This represents a potential saving of €2,000.

The reduced rate will not apply to disposals of development land, which will remain subject to CGT at 33%.

Anyone considering the sale of a business, shares or other assets should review the timing and tax implications of a proposed disposal before proceeding.

3. Income Tax and USC

Budget 2027 includes measures intended to provide some relief for individual taxpayers and households.

Income Tax Bands

The Standard Rate Cut-Off Point is set to increase by €2,500, with corresponding adjustments for married couples and civil partners.

This threshold determines how much income is taxed at the standard Income Tax rate of 20%, with income above the applicable limit generally taxed at 40%.

The Personal Tax Credit, Employee Tax Credit and Earned Income Credit are also due to increase by €125 each.

The combined benefit will depend on an individual’s circumstances, including their income, tax credits and whether they are jointly assessed with a spouse or civil partner.

Universal Social Charge

The entry threshold for the 3% USC band is set to rise from €28,700 to €30,300.

The adjustment is intended to take account of the increase in the National Minimum Wage and may reduce USC for some taxpayers.

Individuals and business owners should review their expected take-home pay and remuneration arrangements in light of the revised thresholds.

4. Gifts, Inheritances and Wealth Planning

Capital Acquisitions Tax Thresholds

The tax-free thresholds for gifts and inheritances are set to increase across all three Capital Acquisitions Tax (CAT) groups.

CAT group	Existing threshold	Proposed threshold
Group A	€400,000	€420,000
Group B	€40,000	€44,000
Group C	€20,000	€22,000

Group A generally covers gifts and inheritances from parents to children, subject to the relevant rules. Group B includes certain close relatives, such as siblings, while Group C applies to other relationships.

As CAT is generally charged at 33% on taxable benefits above the relevant available threshold, the proposed increases could reduce the tax payable on some gifts and inheritances.

For example, a €20,000 increase in an available Group A threshold could represent a potential CAT saving of €6,600 where the full additional threshold is used against an otherwise taxable benefit.

For families considering succession or lifetime gifting, the changes may provide an opportunity to review existing plans and make use of available thresholds.

5. Investment and Savings

Proposed Irish Investment Account

A new Irish Investment Account has been announced, with a proposed launch date of 1 July 2027.

The announced framework includes:

• A €50,000 account-value threshold before the annual account tax applies.
• An annual tax of 1% on the value exceeding that threshold.
• A maximum annual contribution of €12,000, with no minimum contribution.
• Administration handled by the account provider, reducing the need for individuals to deal directly with Revenue for routine account administration.

For illustration, an account valued at €52,000 would produce an annual tax liability of €20 under the announced approach, calculated as 1% of the €2,000 excess.

The account is intended to operate outside certain existing investment tax regimes, including specified fund, dividend withholding and life assurance exit-tax rules. The usual deemed disposal rules are also not intended to apply to investments held within the account.

The full terms, eligibility requirements and operating arrangements will need to be confirmed through legislation.

Taxation of Investment Funds

The deemed disposal regime for relevant investment funds and life assurance products will remain in place.

Under this regime, investors can become liable to tax on investment growth at specified intervals, even where they have not sold their investments.

However, the applicable tax rate is set to decrease from 38% to 35%.

Investors should consider how the revised rate affects their portfolios alongside the existing rules on investment holding periods and taxable events.

6. Property and Housing

Budget 2027 includes several announcements affecting renters, homeowners, landlords and prospective property buyers.

Rent Tax Credit

The maximum Rent Tax Credit is set to increase to €1,150 for an individual claimant and €2,300 for a qualifying jointly assessed couple.

Eligibility requirements will continue to apply, so taxpayers should confirm whether they qualify and how the credit can be claimed.

Rent-a-Room Relief

The annual limit for Rent-a-Room Relief is proposed to increase from €14,000 to €16,000.

The relief is also due to be extended to qualifying newly installed detached auxiliary dwellings, with the announcement applying retrospectively to July 2026.

An important consideration is that exceeding the applicable income limit can result in the loss of the relief rather than simply making the excess amount taxable. Anyone approaching the threshold should review their position carefully.

Help to Buy Scheme

The maximum Help to Buy refund is set to increase from €30,000 to €35,000, effective from 6 October 2026.

The scheme remains subject to its eligibility criteria and other conditions. The revised maximum is not a guaranteed refund for every first-time buyer.

Prospective buyers should assess their eligibility and the potential benefit when planning a property purchase.

Zoned Land and Derelict Properties

A further opportunity to seek an exemption from Residential Zoned Land Tax in 2027 has been announced for certain landowners seeking rezoning to reflect genuine economic activity. Applications will be considered by the relevant local authorities.

Separately, legislation for a new Derelict Property Tax is expected to be included in the Finance Bill, with a proposed rate of 7%. Preliminary registers are expected on 1 September 2027.

Owners of potentially affected properties should monitor the legislation and any associated registration or compliance requirements.

7. Childcare and Education

Childminding Relief

The limit for Childcare Services Relief is set to increase from €15,000 to €20,000, alongside the removal of the limit on the number of children for the purposes of the relief.

This is a targeted measure for qualifying home-based childminding activities and should not be confused with a general tax-free allowance for all childcare businesses.

Third-Level Education Fees

The amount excluded when calculating Income Tax relief for qualifying third-level education fees is due to be aligned with the Student Contribution rate.

Further details will be required to establish the revised amount and how the measure will operate in practice.

8. Research and Development

Several proposed changes aim to make the Research and Development (R&D) tax credit more accessible and reduce the administrative burden for qualifying businesses.

The announcements include:

• An increase in the first-year payment threshold from €87,500 to €105,000.
• An increase in the subcontracting percentage limit from 15% to 20%.
• An increase in the monetary limit for subcontracting from €100,000 to €200,000.
• An enhancement relating to qualifying R&D wage costs, with the detailed calculation method still to be confirmed.
• A proposed measure allowing the regulatory status of a clinical trial to help satisfy the scientific test.
• Recognition of R&D tax credits for preliminary tax purposes.

These measures could be relevant to companies undertaking qualifying development, innovation or scientific activities.

Businesses should review their current R&D processes and expenditure to determine whether they may benefit from the proposed changes.

9. Agriculture and Farm Succession

Budget 2027 includes a number of measures aimed at supporting agricultural businesses and succession planning.

Succession Farm Partnerships

For applications made from 1 January 2027, the three-year holding period for Succession Farm Partnerships is set to be removed.

For partnerships registered from that date, the annual succession tax credit is proposed to increase from €5,000 to €10,000 for five years, subject to the scheme’s conditions.

This could be particularly relevant to farming families planning the transfer of a farm to the next generation.

Other Agricultural Measures

Additional announcements include:

• Extending accelerated capital allowances for farm safety equipment to 31 December 2029, with 12 additional items included.
• Reducing VAT on respiratory vaccines for livestock from 23% to 9%.
• Increasing the Farmers’ Flat Rate Addition from 4.5% to 4.8% in 2027.

Farmers should consider these changes alongside their investment plans, operating costs and longer-term succession arrangements.

10. Start-Ups and Business Investment

Extensions have been announced for several schemes designed to encourage investment in businesses and support entrepreneurship, subject to State Aid approval.

The schemes include:

• Employment Investment Incentive (EII).
• Start-Up Capital Incentive (SCI).
• Start-Up Relief for Entrepreneurs (SURE).
• Angel Investor Relief.

The small-company corporation tax relief for start-ups is also set to be extended.

The revised expiry dates and full implementation details were not specified in the Budget announcement. Businesses and investors should therefore await further guidance before relying on the proposed extensions when making investment decisions.

11. Corporation Tax and Business Administration

Preliminary Corporation Tax

The Minister has indicated an intention to increase the threshold used to determine whether a company qualifies as a small company for preliminary corporation tax purposes.

Further simplification measures are also planned, although the revised threshold and commencement details have not yet been confirmed.

The proposals may be particularly relevant to smaller companies managing their tax payment schedules and cash flow.

Professional Services Withholding Tax

A move towards personalised deduction rates for Professional Services Withholding Tax (PSWT) has been proposed to replace the existing flat 20% deduction.

The change will require a commencement order following engagement with stakeholders. It should not be treated as an immediate change to the current payment process.

Professional service providers should continue to follow the existing rules until the revised arrangements formally take effect.

What Should You Do Next?

Budget announcements can create opportunities, but the practical impact will vary depending on your personal circumstances, business structure, investment portfolio or property interests.

Some measures will require legislation or further guidance before their full effect is clear. It is therefore important to distinguish between announced proposals and changes that are already in force.

If you run a business, employ staff, own rental property, invest regularly or are considering transferring wealth to family members, now is a useful time to review your existing arrangements and identify any areas that may need attention.

Our team can help you understand the proposed changes, assess their potential impact and plan ahead for the 2027 tax year. Contact us to discuss how Budget 2027 may affect you or your business.