Minister for Finance Paschal Donohoe said the Budget aims to boost productivity, protect jobs, and strengthen Ireland’s economic foundations.

Ireland’s Department of Finance has released the Budget 2026, which was presented on 7 October 2025, introducing tax measures related to VAT, housing measures and personal income tax.

Tax measures: 

  • 9% VAT on gas and electricity to 31 December 2030
  • 9% VAT on food, catering and hairdressing services from 1 July 2026
  • Increase in R&D Tax Credit to 35%
  • 9% VAT on sale of apartments
  • Enhanced Corporation Tax Deduction for Apartment Construction Expenses
  • Expansion and enhancement of Living City Initiative
  • Increase in the USC Middle threshold by EUR 1,318
  • Decrease in Tax on Certain Investments to 38%
  • Extend Rent Tax Credit to 31 December 2028
  • Increase in the Excise Duty and VAT on a pack of cigarettes by EUR 0.50
  • Increase in lifetime limit for revised entrepreneur relief to EUR 1.5 million
  • Extension of the tax deduction for manufacture of Uilleann Pipes and Irish Harps

“Budget 2026 is built on three priorities. First, we will ramp up investment in vital infrastructure, which will boost productivity, protect jobs and support long-term growth. Second, we will make targeted improvements to public services, making sure that they are reliable, accessible and efficient. Third, as alluded to by Minister Donohoe, we will strengthen our economic foundations, so we are better prepared to weather future uncertainties,” said The Minister for Finance, Paschal Donohoe.

To support delivery of these priorities, the Budget allocates EUR 116.8 billion in 2026, an EUR 8.1 billion increase on this year’s allocation. An additional EUR 6.1 billion will be allocated as current expenditure, with the budget for capital projects increasing by EUR 2 billion.

The current expenditure package will provide:

  • EUR 2 billion for Social Protection – to provide for our growing population, expand existing schemes, and deliver a series of targeted new measures
  • EUR 1.5 billion for Health – to hire more frontline staff and enhance the level of service that is being provided
  • EUR 1.2 billion for public service pay agreement adjustments
  • A further EUR 1.4 billion is being provided to broaden supports in a range of other sectors

Overall, this will support an increase of 12,500 staff to deliver services directly to the public, including:

  • over 3,370 in the Health Sector
  • 2,600 in the Education sector, and
  • up to 1,000 in An Garda Siochana

“I will also be setting aside EUR 1 billion in a contingency reserve to be held centrally. This will allow us to respond to exceptional in-year expenditure pressures in 2026 and will fund elements of the costs related to Ireland’s hosting of the EU Presidency,” added Donohoe during his Budget speech.