Budget 2026

Budget 2026 was announced on Tuesday, 7 October 2025.

This document summarises the main changes in taxation, social welfare, health, housing, education, employment and other areas.

You can also follow Citizens Information on social media to get updates on Budget Day and after:

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You can access a range of information from gov.ie:

• Budget 2026 hub on gov.ie
• Expenditure reports
• Your guide to Budget 2026
• The Budget Cycle
• Tax Strategy Group Papers (setting out options for tax policy changes)
• Where your money goes website

Some of the changes announced in the Budget will come into effect immediately or before the end of 2025. Others take effect from the beginning of January 2026 or later in 2026. Many others have to be finalised before coming into effect. Some elements of these measures may change when the legislation required to bring them into effect is enacted.

Social welfare weekly payments

From January 2026, the maximum rate of most weekly social welfare payments will increase by €10. There will be proportional increases for qualified adults and people on reduced rates of payment.

The Child Support Payment weekly rate will increase by:

• €8, from €50 to €58, for children under 12
• €16, from €62 to €78, for children aged 12 and over

Christmas Bonus

In December 2025, people getting a qualifying social welfare payment will get a Christmas Bonus of 100%.

Working Family Payment

Working Family Payment income limits will increase by €60 a week for all family sizes.

Working Family Payment will become a qualifying payment for Fuel Allowance in March 2026. The payment will be backdated to January 2026.

Back to School Clothing and Footwear Allowance

Back to School Clothing and Footwear Allowance will be extended to include children aged 2 and 3 (if they meet the other eligibility criteria).

Carers

From July 2026, the weekly Carer's Allowance income disregard will increase to:

• €1,000 for a single person, from €625
• €2,000 for a couple, from €1,250

The weekly income limit for Carer’s Benefit will increase by €375 to €1,000 (July 2026).

In January 2026, Domiciliary Care Allowance will increase by €20, from €360 to €380 per month.

Fuel Allowance

Fuel Allowance will increase by €5 to €38 per week (January 2026).

People moving from Disability Allowance or Blind Pension to take up work will keep their Fuel Allowance for 5 years (September 2026).

People getting Disability Allowance or Blind Pension will be eligible for Back to Work Family Dividend if they take up employment.

Wage Subsidy Scheme

The base rate of the Wage Subsidy Scheme will increase by €1.20 to €7.50 per hour, and a new rate of €8.50 will be introduced (from April 2026).

Employment schemes

The top-up payment for people on Community Employment (CE), Tús and the Rural Social Scheme will increase by €5 to €32.50 per week. This is in addition to an increase of €10 for most weekly social welfare payments.

The weekly rate for people on Job Initiative will increase by €10.

See the full list of social welfare rates for Budget 2026:

• Pensions
• Working age payments
• Disability and illness
• Carers
• Children and families
• Other payments

Income tax rates and bands

There are no changes to the tax rates and bands.

Tax credits

There are no changes to tax credits.

Universal Social Charge (USC)

The 2% rate band limit for USC will increase to €28,700 (from €27,382) from 1 January 2026.

This means that the increase in the national minimum wage of 65 cent per hour, from 1 January 2026, will not bring full-time workers into the higher 3% rate band.

Rent Tax Credit

The Rent Tax Credit will be extended for a further 3 years, to the end of 2028.

Value Added Tax (VAT)

The VAT rate on food and catering businesses, and hairdressing services, will be reduced to 9% from 13.5%, from 1 July 2026.

The 9% VAT rate on electricity and gas bills will be extended to 31 December 2030.

The VAT rate on completed apartments is reduced to 9% from 13.5%, from 8 October 2025 until 31 December 2030.

Carbon tax

Carbon tax on petrol and diesel will increase to €71 per tonne of carbon dioxide emitted (from €63.50 per tonne) from 8 October 2025. This increase will apply to other fuels from 1 May 2026.

Tobacco

Excise duty on a packet of 20 cigarettes will increase by 50 cent from 8 October 2025.

Derelict Property Tax 

A new Derelict Property Tax will be introduced to replace the existing derelict sites levy paid to local authorities. The new tax will be at least 7% of the market value of the property and will be collected by Revenue. It will not be in place before 2027.

Minimum wage 

The national minimum wage will increase by 65 cents to €14.15 per hour from 1 January 2026.

USC

The ceiling for the 2% Universal Social Charge (USC) band will increase by €1,318 to €28,700 in line with the 65 cent per hour increase in the national minimum wage from 1 January 2026. This ensures that full-time employees on the minimum wage will remain outside the higher rates of USC.

Supports for unemployed people 

Community Employment (CE) and Tús weekly top-up payments will increase by €5 to €32.50. This is in addition to an increase of €10 for most weekly social welfare payments.

Supports for people with disabilities

The base rate of the Wage Subsidy Scheme for people with disabilities will increase by €1.20 to €7.50 in April 2026. A middle rate of €8.50 will also be introduced.

Income scheme
The pilot Basic Income for the Arts scheme will be developed into a successor scheme in 2026. The application criteria will be announced, and applications will open in 2026.

Supports for business

Research and Development (R&D) Tax Credit

The Research and Development (R&D) Tax Credit will increase from 30% to 35% on qualifying expenditure on research and development. The first-year payment threshold will increase from €75,000 to €87,500.

Capital Gains Tax Revised Entrepreneur Relief

The lifetime limit on gains eligible for the Capital Gains Tax Revised Entrepreneur Relief will increase from €1 million to €1.5 million, for disposals made from 1 January 2026.

Sectoral supports

Hospitality sector

A reduced VAT rate of 9% for food and catering businesses and hairdressers, will apply from 1 July 2026.

Gaming industry

The Digital Game Tax Credit will be extended for 6 years to 31 December 2031.

Audio visual sector

The Section 481 Film Tax Credit will be enhanced with a new 40% rate of relief for productions with eligible expenditure over €1 million. This rate will apply up to a maximum of €10 million per production.

Rent Tax Credit

The Rent Tax Credit has been extended to the end of 2028. The credit, for people paying for private rented accommodation, was due to end this year. The credit remains at the current level of 20% of your rent payments in the year, up to a maximum credit of:

• €1,000 for an individual
• €2,000 for a couple who are jointly assessed for tax

Mortgage interest tax credit

The mortgage interest tax credit has been extended for another 2 years, so will be available for 2025 and 2026.

The credit is available on the increased interest you pay on your mortgage in 2025 and 2026 compared with the amount you paid in 2022.

In 2025, tax relief on the increase will be 20%, which is the standard income tax rate, and it will be capped at €1,250 per property.

There will be a reduced level of relief for 2026 and a maximum tax credit of €625 per property for that year.

VAT rate reduced on sale of completed apartments

The VAT rate on the sale of completed apartments will be reduced from 13.5% to 9%. This change starts on 8 October 2025 and will apply until 31 December 2030.

New Derelict Property Tax

A new Derelict Property Tax will be introduced to replace the existing derelict sites levy paid to local authorities. The new tax will be at least 7% of the market value of the property and will be collected by Revenue. It will not be in place before 2027.

Residential Development Stamp Duty Refund Scheme

The Residential Development Stamp Duty Refund Scheme, which was due to end in 2025, will be extended to 2030. This scheme allows for a refund on a portion of the stamp duty you paid for non-residential land, if you then develop the land for residential use.

The time limits for the scheme have also been extended for large-scale residential developments.

A full stamp duty refund will also be available for multi-phase developments at the start of the first phase of the development.

Cost rental housing

Rental profits from homes in the Cost Rental Scheme will be exempt from corporation tax. This exemption applies to developments that fall within the cost rental scheme from 8 October 2025.

Living City Initiative

The Living City Initiative, which supports the regeneration of older housing and commercial properties in designated Special Regeneration Areas in Cork, Dublin, Galway Kilkenny, Limerick and Waterford, will be extended to the end of 2030. It will be available to residential properties built before 1975 instead of 1915.

If the work is carried out by an enterprise, the maximum relief available will be increased from €200,000 to €300,000. The Living City Initiative will also be extended to these towns in the coming years, Athlone, Drogheda, Dundalk, Letterkenny and Sligo.

Income tax deduction for landlords who retrofit properties

The income tax deduction for small landlords, who retrofit their properties will be extended for 3 more years.

Corporation tax deduction for apartment construction costs

A corporation tax deduction is being introduced for qualifying apartment construction costs. The measure will allow an increase of 125% in the qualifying costs, up to a maximum additional deduction of €50,000 per apartment. This is available for developments with 10 or more apartments.

Medical card holders and Universal Social Charge

The reduced rate of Universal Social Charge (USC) for medical card holders is extended until 31 December 2027. Reduced rates of USC apply to medical card holders whose annual income is €60,000 or less.

New HSE staff

The Department of Health is allocated funding for an extra 3,300 HSE staff (in addition to current funding for 133,306 staff).

Farming

Extension of reliefs for farmers

Certain reliefs for farmers that were due to end will be extended to the end of 2029, including the:

• Farm Consolidation Relief (stamp duty)
• Young Trained Farmer Relief (stamp duty)
• Farm Restructuring Relief (CGT)

The Farm Restructuring Relief will be extended to include woodlands and forestry, and the Farm Consolidation Relief will be broadened to cover non-commercial woodland and forestry.

Slurry storage facilities 

The Accelerated Capital Allowance Scheme for slurry storage facilities has been extended for 4 years to 31 December 2029. This scheme allows for capital expenditure on slurry storage buildings and associated equipment to be written off at 50% per year over 2 years.

Farmer’s Flat Rate Payment

The Farmer’s Flat Rate Payment rate for 2026 will be 4.5%, down from 5.1% in 2025. This payment compensates farmers who opt not to register for the VAT on their purchases. The rate is revised every Budget and is calculated based on an average of VAT costs over the previous 3 years.

Bovine TB action plan

The funding allocation for the Bovine TB programme is more than doubled in 2026 compared with 2025 to support bringing in the new Bovine TB Action Plan.

Carbon tax

From 8 October 2025, the rate of carbon tax for petrol and diesel will increase from €63.50 to €71 per tonne. The increase will apply to home heating fuels from 1 May 2026.

The VRT relief of €5,000 for electric vehicles will be extended for another year until the 31 December 2026.

Benefit-in-Kind

The €10,000 reduction on the Original Market Value when calculating Benefit-in-Kind (BIK) for company cars will remain for 2026, then reduce to €5,000 in 2027, €2,500 in 2028 and end in 2029.

A new vehicle category (A1) is being created for zero-emission cars, from 1 January 2026. BIK on category A1 cars will be calculated at between 6% and 15% of the cars original market value (OMV), subject to business mileage.

Accelerated Capital Allowances

The Accelerated Capital Allowances schemes for energy-efficient equipment, gas vehicles, and refuelling equipment have been extended until 31 December 2030.

Tax exemption for micro-generation of electricity

The income tax disregard for household income from selling electricity from micro-generation back to the grid has been extended to the end of 2028. The disregard remains at €400.

The Department of Transport has allocated funding for:

• The rollout of the DART+ Programme and Bus Connects Programmes in Dublin and our regional cities, including the construction of 2 Core Bus Corridors in Dublin
• The Cork Area Commuter Rail phase 1 and the Enterprise fleet replacement project
• National road projects, including the Adare Bypass, the N5 Ballaghaderreen to Scramogue and the M28 Cork to Ringaskiddy
• Progressing the Dublin Metrolink

Carbon tax

From 8 October 2025, the rate of carbon tax for petrol and diesel will increase from €63.50 to €71.00 per tonne. The increase will apply to all other home heating fuels from 1 May 2026.

Electric vehicles

The €5,000 VRT relief for electric vehicles is extended until 31 December 2026.

Benefit-in-Kind

The €10,000 Benefit-in-Kind (BIK) on the Original Market Value for company cars will remain for 2026, then reduce to €5,000 in 2027, €2,500 in 2028 and end in 2029.

A new vehicle category (A1) is being created for zero-emission cars, from 1 January 2026. BIK on category A1 cars will be calculated at between 6% and 15% of the cars original market value (OMV), subject to business mileage.

Other announcements

The Accelerated Capital Allowances schemes for energy-efficient equipment, gas vehicles, and refuelling equipment have been extended until 31 December 2030.

The income tax disregard of €400 for household income from selling electricity from micro-generation back to the grid is extended to the end of 2028.

Third level student contribution

The annual student contribution fee will be permanently reduced by €500. This means the maximum contribution any student will pay is €2,500 (previously €3,000). The Government announced that the reduced fee will benefit students in 2025-2026.

Apprentices in higher education will also have their contribution reduced by up to 17%, on a pro-rata basis.

Third level student grants

From 1 September 2026, the income threshold for the student contribution grant of €500 will increase from €115,000 to €120,000. This means more students will qualify for it than before.

Students who live more than 30km from their third level institution, and who meet the other criteria for the SUSI maintenance grant, will get an increased grant:

• Of between €111 and €239 in January 2026 (for academic year 2025-2026)
• Of between €200 and €430 in September 2026 (for academic year 2026-2027)

Your increased grant rate depends on which student grant band you’re in.

Meanwhile, from January 2026, postgraduate students who are eligible for the postgraduate fee contribution grant will get €4,500 (previously €4,000). This does not apply to students getting the special rate of grant.

Special educational needs

Funding for:

• 860 extra special education teachers working across various Special Educational Needs (SEN) settings, including special classes, special schools, and mainstream settings
• 1,717 additional special needs assistants (SNAs) working across primary, post-primary, and special schools (from September 2026)

Educational disadvantage

A new scheme called DEIS+ will target schools with the highest levels of educational disadvantage. This is in addition to the existing DEIS programme.

Capitation rates for schools

The standard capitation rates paid to all schools per child enrolled will be increased by:

• €50 for primary and special schools, from €224 to €274
• €20 for post-primary schools, from €386 to €406

Childcare 

Help with childcare costs

In the coming months, the Government will set a new maximum fee cap (upper limit) for families paying the highest childcare fees. This only applies to early learning and childcare services that get core funding from the State. The current maximum fee cap for childcare is €295 per week. Parents can continue using the National Childcare Scheme (NCS) to further reduce their childcare costs.

In 2026, approximately 35,000 additional children will benefit from increased funding for the National Childcare Scheme (NCS), compared to 2025.

Funding for Early Childhood Care and Education programme (ECCE) will continue as before.

Access and Inclusion Model (AIM) for children with a disability

From October 2025, there will be a 10% increase in the capitation rate (rate per-pupil) for Access and Inclusion Model (AIM) level 7.

The AIM level 7 gives funding to pre-schools with children who need extra support. Pre-school providers can use the funding to either reduce the child-to-adult ratio, or to fund an extra staff member as a shared resource with other children.

Guardian ad litem National Service

Funding has been allocated for the implementation of the new Guardian ad litem National Service within the Department of Children, Disability and Equality.

National Counter Disinformation Strategy

The Department of Culture, Communications and Sport is allocated €1.1million to implement the National Counter Disinformation Strategy.

International protection

The Department of Justice, Home Affairs and Migration is allocated €1.6 billion in contingency funding for the following projects:

• International protection processing
• International protection accommodation
• Accommodation for recipients of Temporary Protection from Ukraine

Public sector pay agreement

An extra €1 billion is allocated to fund the costs of the public sector pay agreement. In 2026 the estimated cost of the agreement will be €1.2 billion for all sectors including pension costs.