Income Tax
The key elements of the personal income tax package will see the standard rate cut-off point for a single person increased by €2,500 to €46,500, with commensurate increases in the bands applying to married persons and persons in civil partnerships. It will also see the main personal tax credits (Personal, Employee/PAYE and Earned Income) increased by €125 each to €2,125. In addition, it will see the Home Carer Tax Credit increased by €100, to €2,050.
USC Changes
For USC, the 2% rate band ceiling will be increased by €1,600 to €30,300 to take account of the National Minimum Wage increase which will apply from 1 January 2027.
Childcare Services Relief
The Childcare Services Tax Relief will provide a tax exemption for individuals providing childcare services in their own home.
The Bill provides that a childminder providing childminding, in their own home, can earn up to €20,000 exempt from Income Tax and USC, increased by €5,000 from €15,000.
The maximum of three children which can be minded under the scheme will be removed. Childminders availing of the relief will continue to be subject to the current childminding regulatory requirements.
Investment Account
Following commitments provided for in Budget 2026, a Roadmap entitled, ‘Taxation of Retail Investment – A New Path Forward for Ireland’ was published on 31 August 2026 which included an overview of the key parameters for the new investment account, further details on which were announced on Budget Day. The investment account, which will be available from 1 July 2027, is a new approach to the taxation of investments in Ireland, applying to all forms of investments held within a qualifying account.
The primary purpose of the investment account is to make investing simpler, clearer and more accessible. The account is designed to reduce some of the barriers that may discourage individuals from investing and to provide a straightforward, tax-efficient framework.
The account will be available to Irish resident individuals, aged 18 and over, who hold a PPSN. The account will include a flat rate 1% tax applied to the value of the account above the €50,000 tax free threshold, with an annual contribution limit of €12,000. The value of the account will be calculated daily, with the average of the daily values being used for the purpose of calculating the tax due, if any.
On launch, only one account will be allowed per person, with consideration being given in future years to whether provision can be made for multiple accounts. The account provider will be responsible for calculating whether tax is due or not, and for paying any tax due to Revenue on behalf of the investor. Existing taxation regimes in place for retail investments, including the deemed disposal rule, will not apply to the account.
Changes to the Taxation of Investments
As part of Budget 2027, the rates of taxation that apply to investments in Irish domiciled investment funds and Irish life assurance policies will be reduced, other than those applying to companies and to personal portfolio investments in these types of investment products. The rate reduction will also apply to equivalent offshore investment funds and certain foreign life assurance policies.
The rate of Investment Undertaking Tax and Life Assurance Exit Tax will be reduced from 38% to 35% as will the rate of tax that applies to equivalent offshore investment funds and to certain foreign life assurance polices.
The Bill will also clarify and consolidate some of the legislation underpinning this area of taxation, by introducing new provisions specifically dealing with the taxation of investors in Irish domiciled investment funds whose units are held in a recognised clearing system (including Irish domiciled exchange-traded funds (ETFs)). These new provisions will align with the existing rules which apply to other Irish domiciled investment funds and the 35% rate of tax will apply.
Micro-generation of Electricity
The exemption from Income Tax, USC and PRSI for certain profits arising to a qualifying individual who generates energy from renewable, sustainable or alternative energy sources for their own consumption and sell the surplus electricity back to the grid, will be increased from €400 to €600 per annum.
Donation of Heritage Items
Tax relief is available in respect of donations of heritage items to Irish national collections.
The maximum aggregate market value of items that can be donated under the scheme will be increased from €8 million to €12 million a year from 2027 onwards.
Income Tax relief on Third Level Fees
Income tax relief is available for individuals on qualifying tuition fees for approved third-level courses in approved colleges. Each claim is subject to a single disregard amount, which is being aligned with the Student Contribution Fee rate.
From the 2026 year of assessment onwards, the disregard amount will be reduced by €650, from €3,000 to €2,350 for full-time students and by €325, from €1,500 to €1,175 for part-time students.
Nurturing Skills Learner Fund
The Bill provides for an exemption from Income Tax, USC and PRSI for rebates paid for qualifying students under the Nurturing Skills Learner Fund who remain in childcare employment for a continuous six months after they complete a relevant third level course.