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Tax Return Plus Budget 2026 Summary

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Budget 2026 was presented today, Tuesday, the 7th of October 2025.

According to Gerry Scully, Senior Accountant at Tax Return Plus, “It has been well flagged in advance that the government were going to focus on infrastructure spending as opposed to providing tax relief to workers.

“This has proved to be the case with very little tax relief for workers. However, some valuable tax credits such as the rental tax credit and the landlord tax credit have been extended into the future, which is a positive for both renters and landlords.”

Our tax experts at Tax Return Plus have comprehensively reviewed the Budget and its implications for our clients. As a valued client of Tax Return Plus, we hope you will find the below summary informative in relation to your circumstances.

The Tax Return Plus newsletter will continue to keep our clients updated in relation to the introduction of supports and changes in Irish tax law.

Top 5 highlights from Budget 2026 (7th October 2025)

  • The mortgage interest tax credit has been extended into 2028. If your mortgage interest payments in 2026 are higher that the reference year of 2022, you can obtain a tax refund of 20% of the increase up to a value of €1,250
  • The increasing of the ceiling on the second USC rate band by €1,318 will result in a tax saving of €26 per year, for those who earn over €28,700
  • Rent tax credit of €1,000 for a single person and €2,000 for a married couple continues until the end of 2028. This applies to both those renting and those paying for a child’s accommodation while attending third level
  • Revised Entrepreneural Capital Gains Tax relief of 10% will increase on gains from €1m to €1.5 million for the sale of business
  • Foreign Earnings Deductions (FED) extended to Turkey and the Philippines with the ceiling increased from € 35,000 to €50,000 to encourage growing markets in emerging economies

Irish Resident Landlords

In addition to points 1-5 mentioned above in our highlights section, Budget 2026 has confirmed the continuation of the Residential Premises Rental Income Relief (RPRIR) also known as the landlord tax credit. This credit increases from €600 in 2024 to €1,000 for both 2026 and 2027

Retrofit of derelict properties extended for 3 years for all small landlords.

Non-Resident Landlords

As mentioned in the Irish Resident Landlords section, the landlord tax credit will also apply to Non-Resident Landlords. However, as with all tax credits for Non-Residents, the value of the tax credit is based upon the proportion that Irish income accounts for in your overall worldwide income. In relation to point 2 from the Highlights Section, this will not benefit Non-Resident Landlords unless there is significant Irish based income. In the case of USC, the amount is a profit of €28,700.

Employees availing of Share Benefit Schemes

As per the highlights section above, you will benefit from the adjustment of the Universal Social Charge (USC) band. As per the Capital Gains Tax (CGT) Section below, there has been no change to this tax head. The tax rate will remain at 33%, with the first €1,270 annual gain exempt from CGT.

Relevant Contracts Tax (RCT)

In addition to points 1-3 above, there has been significant tax breaks to encourage construction. Universal Social Charge (USC) as mentioned in Highlights Section 1-3 will provide a tax saving of €26 to many workers in 2026.

Special Assignee Relief Programme (SARP)

This scheme which attracts highly skilled individuals to work in Ireland, has been extended to 31/12/2031 with an increase of the income threshold from €100,000 to €125,000. A total of 2,600 individuals avail of this credit annually.

Capital Gains Tax (CGT)

The annual personal gain exemption threshold remains at €1,270 and the CGT Rate of 33% has not been adjusted in Budget 2026.

Capital Acquisitions Tax (CAT) & Gift Exemption

The annual personal gift exemption of €3,000 per individual gift has not changed and the tax rate for Capital Gains Tax remains at 33% save for Entrepreneurial Relief mentioned in point 4 above.

The thresholds relating to inheritance and gifts have also remained in line with last year.

Corporation Tax

There has been no change in the Corporation Tax rate of 12.5% in Budget 2026. There is continued discussion internationally around the proposed introduction of a global Corporation Tax rate. Some construction companies will get reduced corporation tax and a VAT cut for the sale of certain residential buildings to encourage construction.

Additional points of interest from Budget 2026

  • Social Welfare, including the state pension, to increase by €10 per week
  • €500 permanent reduction in third level student contribution levy, although the €1,000 temporary reduction has been removed
  • Increase in the weekly child support payment by €8 for children under 12 & €16 for children over 12 years of age
  • A decrease in the VAT rate from 13.5% to 9% will come into effect in July 2026 for all business in the food hospitality sector
  • Reduced USC rate remains for medical holders who earn less than €60,000
  • Living City Initiative in our main cities is to be extended to end of 2030 Buildings pre-1975 and extension for over the shop will qualify The incentive has increased from €200,000 to €300,000
  • New derelict property tax to now be collected by the Revenue commissioners as opposed to local authorities

Ensure you’re making the most of all available tax credits in 2026. Book a consultation with our team of expert advisors today.

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