Ireland Budget 2027: Full summary for Irish businesses

Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers have delivered Budget 2027, unveiling a €1.3 billion personal tax package, employer cost-relief measures, capital tax reductions, and structural enterprise supports.

Framed against a backdrop of global economic uncertainty, Budget 2027 aims to reward work, mitigate rising operational costs for SMEs, and encourage indigenous business growth across Ireland.

Below is the definitive overview of what was announced in Budget 2027 and how these changes directly impact Irish companies, business owners, and employers.

1. Business taxation, enterprise & employer supports

• Capital Gains Tax (CGT) cut to 31%: The standard rate of CGT is reduced from 33% to 31%. This lower rate aims to mobilize private capital, incentivize business expansion, and lower exit costs for owner-managers.
• Employer PRSI threshold raised to €600 per week: To help offset higher wage costs, the weekly entry threshold for the higher rate of Employer PRSI is increased from €552 to €600 per week. This measure provides relief of up to €650 - €700 per eligible employee annually.
• National Minimum Wage up by 7%: Increases by 79 cents to €14.94 per hour, taking effect from 1 January 2027.
• Startup & scale-up capital initiatives:
  • €1 billion allocated to the Irish Strategic Investment Fund (ISIF) to support scaling indigenous Irish companies.
  • Launch of Startup Ireland with €3m initial funding via Enterprise Ireland as a unified portal for founders.
  • €150 million multi-year fund established for business upskilling in AI.
• Targeted support for hospitality: A new €15 million scheme dedicated to supporting rural publicans facing high overheads.

2. Income Tax, USC & payroll adjustments

• Standard Rate Cut-Off Point extended: The 40% higher income tax band increases by €2,500, moving from €44,000 to €46,500 for single earners (and up to €55,500 for married single-earner couples).
• Personal Tax Credits increased: Personal Tax Credit, Employee PAYE Credit, and Earned Income Tax Credit all increase by €125, bringing standard employee tax credits to €2,125.
• Universal Social Charge (USC): The 2% USC ceiling threshold increases by €1,600 from €28,700 to €30,300, keeping minimum wage workers outside higher USC tiers.
• Home Carer Credit: Increased by €100.
• Combined impact: A single worker earning €50,000 will see annual tax savings exceeding €700, while a dual-income couple earning €100,000 combined will save approximately €1,500 per year.

3. Launch of the Irish Personal Investment Account

The Government announced a major structural savings reform - the Personal Investment Fund - launching on 1 July 2027:

• Annual contribution limit: Capped at €12,000 per year.
• Tax-free growth threshold: Investors can accumulate up to €50,000 completely tax-free.
• 1% flat tax rate: Holdings above €50,000 are subject to a flat 1% annual tax.
• Tax exemptions: Exempt from Capital Gains Tax (CGT), Dividend Withholding Tax (DWT), Investment Undertaking Tax (IUT), and Life Assurance Exit Tax.

4. Capital Acquisitions Tax (CAT) & inheritance thresholds

CAT tax-free thresholds across all three categories have been increased:

• Group A (Parent to child): Raised from €400,000 to €420,000.
• Group B (Siblings, nieces, nephews, grandchildren): Raised from €40,000 to €44,000.
• Group C (Other relations / unrelated individuals): Raised from €20,000 to €22,000.

5. Property, rent & real estate

• Help to Buy (HTB) Scheme: Maximum claim threshold increased by €5,000, moving from €30,000 to €35,000 for first-time buyers.
• Rent Tax Credit: Increased by €150, bringing the maximum credit to €1,150 for single renters and €2,300 for married couples.
• Rent-a-Room Relief: Tax-free threshold increased by €2,000 to €16,000 per year.
• Social & Capital Investment: €9.4 billion total housing allocation, including €3.2bn for social housing delivery (11,250 new homes).

6. Agri-business & farm succession supports

• Succession farm partnerships: The mandatory 3-year holding period is removed, and the succession tax credit is doubled from €5,000 to €10,000.
• Farm safety equipment allowances: Accelerated Wear & Tear Allowance extended to 31 December 2029, with 12 new eligible equipment items added.
• Farmers flat-rate VAT addition: Increased from 4.5% to 4.8%.
• Livestock vaccines: VAT on livestock respiratory vaccines reduced from 23% to 9%.
• Agri schemes: €31 million for a new Fertiliser Scheme and extension of the Fuel Income Support Scheme.

7. Cost of living, energy & infrastructure

• Childcare Monthly Cap: Maximum monthly childcare fees capped at €550 per month (down from €735/month), coming into effect in September 2027.
• Home Heating & Energy: Carbon tax reductions on kerosene and natural gas cut approximately €50 off a 900-litre fill of home heating oil. Carbon tax increases on home heating fuels are frozen for the lifetime of this Government.
• Transport Excise Duties: Temporary cuts on petrol and diesel remain throughout the winter before gradual restoration starting February 2027.
• Electric Vehicles: VRT relief for EVs extended through 31 December 2028.

What this means for your business?

While Budget 2027 offers meaningful statutory payroll adjustment, employer PRSI relief, and targeted CGT cuts, business leaders must immediately account for the minimum wage increase, payroll software adjustments, and changing capital allowances.

What to do next:

1. Assess payroll impact: Review the combined effect of the €14.94 minimum wage rate and the expanded €600 employer PRSI threshold on your wage roll for Q1 2027.
2. Review exit & restructuring timing: Evaluate corporate disposals, M&A activity, or succession plans under the lower 31% CGT rate.
3. Maximise agri & succession reliefs: Farm family partnerships should re-evaluate succession structures to claim the doubled €10,000 tax credit.

How Azets Ireland can help your business?

Navigating the tax and strategic implications of Budget 2027 requires proactive planning. Whether you need to update payroll systems, structure a corporate exit under the new 31% CGT rate, or plan family succession, our team is here to assist.

• Contact our Tax Advisory Team today to discuss what Budget 2027 means for your business.
• Visit our Budget 2027 Hub for upcoming deep-dive technical updates.