Budget 2026

Budget 2026 was announced by Minister for Finance, Paschal Donohoe on Tuesday to the general support of the business community and the juxtaposing ire of the opposition. The Institute’s view is that this Budget is one that balances prudence, thoughtful policy choices, and social support where it is most needed. The package announced is the highest projected public spending growth in the EU. So, it is not clear what more could be done while balancing the risk of intensifying inflationary pressures.  The Budget, of course, is as much a political balancing act as it is an Exchequer one. With that said, we are in the enviable position of running a projected Budget surplus of €10.2 billion this year and a revised projected surplus of €5.1 billion in 2026.  Total spending is projected at €117.8 billion, comprising €97.7 billion in current spending, €19.1 billion in capital investment, and a further €1 billion in unallocated resources. This is an increase of almost €11.4 billion when compared to the Budget Day estimate for 2025. The tax package for Budget 2026 is €1.3 billion, however the full year costs for the measures announced will be approximately €2.3 billion.  The notable omission from the tax package were increases to the income tax standard rate band and the universal tax credits. As I mentioned above, there is always a political dimension to policy making, and so we can reasonably expect a return to income tax changes as we move on into the election cycle. With that political nod made, putting more money by way of tax increases into people’s pockets against the backdrop of inflationary risk can be stood over from a policy perspective. It is not popular, but it is arguably prudent.  Instead, the Government has prioritised enterprise-focused tax changes. They have reinstituted the VAT9 for the hospitality sector, effective from 1 July 2026. They have shown their commitment to the Special Assignee Relief Programme and the Foreign Earnings Deduction, extending these key reliefs for a further five years to 31 December 2030. They have listened to our profession’s call for a targeted, time-limited tax-based lever to stimulate the supply of apartments by instituting VAT9 for the sale of completed apartments, effective immediately. And in a very welcome surprise, they have increased the lifetime limit for disposals of qualifying assets under the Revised Entrepreneur Relief by €500,000 to €1.5 million, effective 1 January 2026.   Clearly, there is much in Budget 2026 that I have received positively from a tax policy perspective. While a lean Budget in some respects, it is a courageous statement from a Government that is willing to make choices to steer the economy towards ever greater prosperity. The Institute, under the auspices of the CCAB-I can reflect positively on our engagement throughout the year with the Government and its institutions in supporting the tax policy agenda, having the hard conversations, and stimulating the ongoing discourse needed to arrive at reasonable choices.  For more information on Budget 2026, you can read our Special Budget Day 2026 Tax Newsletter. Gearóid O'Sullivan ACA CPA

  Several measures were included in Budget 2026 to accelerate Ireland’s energy transition and underpin Ireland’s journey to a net-zero future. Residential buildings were arguably the greatest beneficiaries of the almost €1.1 billion allocated to the Department of Climate, Energy and the Environment. Funding of €558 million – an increase of €89 million on last year’s corresponding allocation – was allocated to Sustainable Energy Authority of Ireland (SEAI) residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme. Public sector building retrofits will also benefit from continued investment, with €21 million allocated for public sector retrofitting for 2026 under the first phase of ICNF (Infrastructure, Climate and Nature Fund). This purpose of this fund is to support State expenditure where there is a significant deterioration in the economic or fiscal position of the State, and in the years 2026 to 2030, on designated environmental projects. The Finance Act 2020 legislated for annual increases in carbon tax to reach €100 per tonne of CO2 emitted by 2030. This year’s increase – announced yesterday in Budget 2026 – brings the tax to €71 per tonne of CO2 emitted. The tax is applied to auto fuels with effect from the 8 October 2025, and to all other fuels from the 1 May 2026. The additional revenue arising from the carbon tax increase is estimated at €121 million in 2026 and the full year additional yield is estimated at €157 million. Commenting, Susan Rossney, Institute Sustainability Advocacy Manager, said “Chartered Accountants Ireland has consistently advocated for taxpayers to be shown a direct link between the carbon tax collected and how they benefit. Therefore, the decision to ring-fence the revenue expected from carbon tax in 2026 to spend on social welfare measures and other measures to prevent fuel poverty, and to ensure a just transition, is welcome. However, more detail will be needed on the distribution of funds to Government’s planned projects, particularly the €209 million which has been allocated to accelerate climate action and prepare Ireland for the impacts of a changing climate, to understand whether the risks from climate change and biodiversity loss have been properly accounted for. This is especially important given the warning from the Irish Fiscal Advisory Council that failing to meet EU climate targets could cost Ireland between €8 and €26 billion by 2030.” The measures funded, relevant Departments, and the allocation for each is outlined in Budget 2026 – The Use of Carbon Tax Funds. Budget 2026 also includes investment in offshore renewable energy site data surveying to assist in the de-risking of future projects. €30 million has been allocated for the Landfill Remediation Programme, described by Department of the Climate, Energy and the Environment as “support[ing] Ireland in transitioning to a Circular Economy, whilst protecting our natural resources, environment and health on the national journey to net zero by 2050”. The extension to 2030 of the Accelerated Capital Allowances scheme for energy-efficient equipment also means that companies investing in, among other things, electric cars for their fleets will be able to write 100 percent of the asset value of those vehicles off against tax in the first year of ownership. Other EV measures include the extension to 2026 of the €5,000 VRT relief for EVs, and the creation of a new vehicle category for zero-emission cars only, where the lowest BIK rates will apply.  Connected to this is the extension of the 9 per cent rate of VAT on gas and electricity bills until the 31 December 2030 which will be welcomed by EV drivers keen to avoid an increase in EV charging prices. The extension to 2028 of the Income Tax disregard of €400 for income received by households who sell electricity from micro-generation back to the grid is to be welcomed, includes electricity sold back to the grid from EVs enabled with Vehicle-to-Grid or V2G technology. To help reinforce the electricity grid, ESB and Eirgrid will receive €3.5 billion.        

The Minister announced a new exemption from the 1 percent stamp duty on the acquisition of shares in Irish registered companies with a market capitalisation of below €1 billion. In addition, several stamp duty reliefs have been extended.  Stamp duty exemption for acquisition of shares   A new exemption from the 1 percent stamp duty on acquisitions of shares in Irish registered companies is being introduced for companies a market capitalisation of below €1 billion. The companies must be admitted for trading on a regulated market, a multi-lateral trading facility, or an equivalent third country market. The exemption is set to expire on 31 December 2030. It is expected to cost €24 million per annum.  As a consequence, the existing stamp duty exemption for shares in Irish registered companies traded on the Euronext Growth Market (formerly the Enterprise Securities Market) will be removed.  Farm Consolidation Relief   Farm Consolidation Relief is being extended to 31 December 2029. The relief provides that a 1 percent rate of stamp duty is charged on the net difference between the value of land sold and land acquired as part of a Teagasc certified farm consolidation. In addition, the scope of the relief is being broadened to include non-commercial woodland/forestry. These measures will be subject to separate commencement orders due to the need to notify the EU Commission appropriately. It is estimated to cost €1.5 million per annum.  Young Trained Farmer Relief   The Young Trained Farmer relief is being extended to 31 December 2029. The relief provides a full exemption from stamp duty on the transfer of farmland, subject to certain conditions being met. The extension will be subject to a commencement order due to the need to notify the EU Commission. The extension of the relief is expected to cost €19.8 million per annum.  Residential Development Stamp Duty Refund Scheme   The Residential Development Stamp Duty Refund Scheme is being extended to 31 December 2030. The scheme provides for a partial repayment of the Stamp Duty paid on the acquisition of land where the land is subsequently developed for residential purposes subject to a number of conditions.   To improve its effectiveness the time limits that apply for acquisition to commencement and commencement to completion are being extended from 30-months to 36-months where an application for a stamp duty refund is made in respect of a large-scale residential development.  In addition, to improve efficiencies in delivery of new housing, a full Stamp Duty refund may be claimed in respect of a multi-phase development at the commencement of the first phase of that development. The extension of the relief is expected to cost €19.8 million per annum.