Budget 2026 - Key Points

Announced today, Tuesday 7 October, by Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Jack Chambers, Budget 2026 marks a pivotal shift in Ireland’s fiscal strategy as the country approaches a presidential election.

Designed to balance short-term relief with long-term resilience, the €9.4 billion package includes €8.1 billion in additional public spending and €1.3 billion in targeted tax measures. The government is moving away from one-off cost-of-living supports, instead focusing on sustainable reforms that stabilise household expenses, support key sectors, and enhance Ireland’s economic competitiveness.

Minister Donohoe stated that “Budget 2026 will invest in our future while also securing current jobs, prosperity and stability.” He also noted that Ireland’s debt ratio has almost halved since 2016, and the economy is forecast to grow by 3.3% in 2025 and 2.3% in 2026. By the end of next year, the Future Ireland Fund and Climate and Nature Fund are expected to hold €24 billion, reinforcing Ireland’s long-term fiscal security.

Key Measures at a Glance:

• The National Minimum Wage is going up 65c to 14.15c per hour.

• The 2 per cent rate band for USC will rise by €1,318 to €28,700, but there will be no broad personal taxation changes.

• VAT reduced for food-led hospitality from 13.5% to 9% (effective July 2026).

• VAT rate for completed apartments reduced to 9 per cent from 13.5 per cent effective immediately until end of 2030 to encourage development.

• R&D tax credit increased from 30% to 35%.

• Digital games tax credit extended to 2031.

• Section 481 Film Tax Credit enhanced to 40% for VFX-heavy productions.

• Entrepreneurial relief CGT lifetime limit raised from €1m to €1.5m.

• Investment fund tax reduced from 41% to 38%.

• Special Assignee Relief Programme extended for five years, with a new €125,000 salary threshold.

• €5,000 VRT relief for EVs extended to end of 2026, tapering until 2029.

• Banking levy extended with a target yield of €200 million.

While personal tax changes remain limited, the government has reaffirmed its commitment to progressive reform over the full term. Budget 2026 signals a clear intent: to safeguard Ireland’s economic future while delivering meaningful support to its citizens and industries.

To discuss the impact of these changes on your business operations and how Cafico International can be of assistance please reach out to Henry Barrett or Yolanda Kelly.