General:
The total Budget for 2026 is set at €9.4 billion. This is primarily divided into €8.1 billion for public spending and a tax package of €1.3 billion.
The initial tax package was reduced by €150 million to ensure targeted financial supports are provided specifically for the most vulnerable in society.
Current and Future Funds:
This year, the government is projecting a significant surplus of €10.2 billion, which is expected to moderate to a €5.1 billion surplus next year.
€24 billion will be placed into both the Future Ireland Fund and the Climate Nature Fund by the end of next year. The government’s goal is to increase this combined total to €40 billion by the end of its term.
Housing:
The government is committing €5 billion to the Department of Housing next year, which includes an extra €200 million for Home Building Finance Ireland to boost construction.
In a significant move to reduce costs and increase supply, the VAT rate on the sale of completed apartments will drop to 9% from midnight tonight until the end of December 2030.
To support development and urban renewal, several tax measures are being introduced or enhanced: the profits from homes under Cost Rental Schemes will be exempted from corporation tax for developments commencing on or after the 8th of October. Additionally, there will be an enhanced corporation tax deduction for specific costs incurred during the building of apartments or the conversion of non-residential buildings into apartments, provided the commencement notice is issued after tomorrow.
A feature of the budget’s urban regeneration plan is the expansion and enhancement of the Living City Initiative. The scheme is expanding its geographical reach by adding five new key towns, including Letterkenny, alongside Athlone, Drogheda, Dundalk, and Sligo.
The initiative itself is being extended until 2030 and its scope is being significantly broadened to allow tax relief for properties built before 1975.
The existing derelict sites levy will be replaced by a new derelict property tax, charged at a rate of no less than 7% of the property’s market value.
The Residential Stamp Duty Refund Scheme is being extended until the end of 2030 with some minor enhancements.
A three-year extension is also being provided for the income tax deduction available to small landlords who retrofit a property.
A further exemption for the Residential Zoned Land Tax will be introduced in 2026 for those seeking to have land genuinely rezoned for economic activity outside of housing.
Income & Household Costs:
The National Minimum Wage will rise by 65c an hour, bringing it to €14.15 per hour.
The ceiling for the 2% band of USC is set to increase by €1,318 to €28,700 to ensure that minimum wage workers do not face a higher USC rate due to the upcoming pay increase
The Renters Tax Credit is being extended until the end of 2028.
Mortgage Interest Relief will be extended for an additional two years, although a reduced rate will apply in the final year.
The temporary 9% VAT rate cut on gas and electricity will be extended until the end of December 2030, providing longer-term relief for household energy costs.
50c has been added to the cost of a pack of 20 cigarettes.
An increase in carbon tax means the price of fuel will increase from midnight.
Social Welfare:
The annual Social Welfare Christmas Bonus will be paid to 1.5 million people at a double rate of their normal weekly payment.
There will be a general increase in the core weekly social welfare payment. Starting next year, social welfare recipients will receive a €10 per week increase in their normal payment rate.
The Carer’s Allowance income disregard is being increased to allow recipients to earn more while retaining their payment.
The disregard will rise to €1,000 per week for a single person and €2,000 per week for a couple.
The Domiciliary Care Allowance is increasing by €20 per month, bringing the total monthly payment to €380.
The Back to School Clothing and Footwear Allowance is now being extended to include children who are two and three years old.
Childcare:
The National Childcare Scheme is being expanded to see an extra 35,000 children benefit from lower fees.
There is funding for measures to improve Year 5 of pay for educators and school-age childcare practitioners.
Additionally, the Building Blocks programme will fund the creation of 2,300 extra childcare places across the country.
Education:
Funding will be allocated for an additional 1,717 Special Needs Assistants in 2026.
There will also be the creation of 1,042 extra teaching posts, with 860 of these specifically designated as additional special needs teachers.
Money has been allocated to implement the DEIS+ plan, which supports disadvantaged schools.
For third level education, there will be a €500 reduction in the student contribution fee.
An money assigned to two new veterinary schools, including at ATU Letterkenny will almost double the number of vet graduates.
