Tax Return Guides

Budget 2027: What It Means for the Self-Employed in Ireland

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Budget 2027 was presented today, Tuesday, 6 October 2026.

“After last year’s Budget, there was widespread criticism that workers did not see any benefit. In Budget 2027, the Government have gone some way to helping taxpayers alleviate the rising cost of living, by increasing both tax bands and tax credits. The introduction of the new State Savings Account is also a welcome addition to get savings working.”

Gerry Scully, Senior Accountant, Tax Return Plus

Our tax experts at Tax Return Plus have reviewed the Budget and what it means for our clients. As a valued client of Tax Return Plus, we hope you will find the summary below useful for your own circumstances. The Tax Return Plus newsletter will keep you updated as new supports and changes in Irish tax law are introduced.

Contents

Key Takeaways

  • The standard rate cut-off point for the 40% tax band increases, bringing the entry point from €44,000 to €46,500
  • The Personal Tax Credit, Earned Income Tax Credit and Employee Tax Credit each increase by €125 to €2,125. The Home Carer Tax Credit increases by €100 to €2,050
  • The upper limit of the second USC band increases from €28,700 to €30,300
  • The Rent Tax Credit increases by €150 for 2027, to €1,150 for a single person and €2,300 for a jointly assessed couple. This applies to renters and to parents who pay for accommodation for children attending university
  • The Capital Gains Tax (CGT) rate is reduced from 33% to 31%, a welcome reduction for entrepreneurs, investors and those who hold shares in their employer’s business. The annual tax-exempt threshold remains at €1,270
  • Introduction of a new State Savings Account (see below for more detail)
  • Changes to Capital Acquisitions Tax thresholds (see below for more detail)

Irish Resident Landlords

The landlord tax credit (RPRIR) announced in previous years will be worth €1,000 for 2026 and 2027.

The Rent-a-Room threshold increases by €2,000, from €14,000 to €16,000.

This is accompanied by a change in planning rules around unattached structures, such as a cabin in a back garden. An unattached rental unit will now be eligible for Rent-a-Room Relief.

Non-Resident Landlords

The landlord tax credit (RPRIR) also applies to Non-Resident Landlords. The credit is applied based on Irish income as a proportion of total worldwide income.

New State Savings Account

The Government has introduced a new savings scheme designed to encourage taxpayers to move savings currently on deposit with banks into an investment account. There will be a tax-free threshold of €50,000 per person, and a flat rate tax of 1% will apply to the value of accounts above this limit. Taxpayers can invest up to €12,000 per year.

The accounts will open on 1 July 2027, through several providers to keep management fees competitive.

Providing Childcare Services in Your Own Home

The childminding relief threshold for those who provide childminding in their own homes increases by €5,000 to €20,000. The previous tax-free threshold of €15,000 had remained unchanged since 2007.

Special Assignee Relief Programme (SARP)

SARP remains extended to 2031, as announced in last year’s Budget.

Capital Acquisitions Tax (CAT) & Gift Exemption

The Capital Acquisitions Tax (CAT) thresholds have increased:

  • Group A: from €400,000 to €420,000
  • Group B: from €40,000 to €44,000
  • Group C: from €20,000 to €22,000.

The gift exemption still remains at €3,000 per person per year.

Corporation Tax and Company Investment Schemes

The Employment Investment Incentive Scheme (EIIS), the Start-Up Capital Incentive, the Start-Up Relief for Entrepreneurs and the corporation tax small company start-up relief have all been extended.

Capital Gains Tax

Capital Gains Tax (CGT), has decreased from 33% tax on gains to 31%:

This is effective from the 07/10/2026 on any gains of disposed assets such as non-principle private residence properties, or shares. These are the most common disposals where CGT applies.

The personal exemption still remains at €1,270.

Additional Points of Interest from Budget 2027

  • The State Pension, along with Jobseeker’s Benefit, will increase by €10 per week
  • Childcare costs reduced to a maximum of €550 per month
  • The minimum wage increases to €14.97 per hour
  • The Help to Buy maximum refund increases from €30,000 to €35,000
  • A commitment to streamline tax rates on investment products
  • The rate of tax for investors in Irish and equivalent offshore funds reduces from 38% to 35%
  • Energy assistance, with a reduction in the rate of carbon tax on both kerosene and natural gas
  • A 7% derelict property tax, to be administered by both local councils and the Revenue Commissioners

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FAQs

1. What is the 40% tax band entry point after Budget 2027?

The standard rate cut-off point for a single person increases from €44,000 to €46,500, so more of your income is taxed at 20% before the 40% rate applies.

2. How much is the Rent Tax Credit for 2027?

The Rent Tax Credit is worth €1,150 for a single person and €2,300 for a jointly assessed couple in 2027. It also applies to parents who pay for accommodation for children attending university.

3. What is the Capital Gains Tax rate after Budget 2027?

The Capital Gains Tax rate is reduced from 33% to 31%. The annual tax-exempt threshold remains at €1,270.

4. How does the new State Savings Account work?

You can invest up to €1,000 per month. There is a tax-free threshold of €50,000 per person, with a flat rate tax of 1% on the value of accounts above that limit. The accounts will open on 1 July 2027.

5. How much can I earn tax-free from renting a room in my home?

The Rent-a-Room threshold increases from €14,000 to €16,000. An unattached rental unit, such as a cabin in a back garden, will now also be eligible for Rent-a-Room Relief.

6. What are the new inheritance and gift tax thresholds?

The Group A threshold increases from €400,000 to €420,000, Group B from €40,000 to €44,000, and Group C from €20,000 to €22,000.

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