It’s Done
At approximately 1pm on Tuesday 6 October 2026, Tánaiste and Minister for Finance Simon Harris stood up in Dáil Éireann and delivered Budget 2027 — an €8.5 billion package that, in the words of Irish Examiner tax analyst Nicola Quinn, “had something for everyone in the audience.” Harris was joined by Minister for Public Expenditure Jack Chambers, who set out the spending side of a package that confirmed the headline numbers signalled since the Summer Economic Statement in July: €7 billion in additional spending and €1.5 billion in tax measures. By the time both ministers had sat down, Ireland had a reduced CGT rate, a new Personal Investment Account, a higher income tax band, increased inheritance tax thresholds, a minimum wage rise and a €1 billion ISIF fund specifically designed to help Irish businesses scale globally while staying rooted here.
The reaction from the business and tax community was broadly positive on the household measures and more cautious on the enterprise side — with most practitioners welcoming the direction while noting that the ambition fell short of what the competitiveness challenge actually demands. Here is what the budget means in practice for both.
For Businesses: The Key Measures
CGT Cut — 33% to 31%
The most immediately significant business measure was the reduction in the headline Capital Gains Tax rate from 33% to 31%, applying to all disposals made on or after 7 October 2026. For business owners planning to sell a company, dispose of a commercial property or realise a capital asset, the saving is immediate and concrete. KPMG Ireland confirmed that the CGT reduction applies to disposals from budget day itself — there is no waiting until January 2027.
The reaction from the tax and business community was welcoming but measured. Grant Thornton tax partner Peter Vale said: “The reduction in CGT is a step in the right direction and sends a positive signal, but at 31% Ireland’s headline rate remains high.” Chartered Accountants Ireland had called for a progressive reduction toward 20%, arguing that Ireland’s previous 33% rate was among the highest in Europe and was materially affecting investment and succession decisions for private business owners. The 2% reduction is the first cut to the headline CGT rate in years but it is a partial move rather than the structural change the business community had been seeking.
The €1 Billion ISIF Scale-Up Fund
One of the most significant business announcements in the budget was the commitment of €1 billion through the Ireland Strategic Investment Fund over three years to support Irish businesses that want to scale internationally while remaining headquartered in Ireland. Irish Examiner analysis confirmed the measure is specifically targeted at the persistent challenge of Irish indigenous companies reaching a certain scale and then being acquired by international buyers or relocating their headquarters abroad to access larger pools of growth capital. The ISIF fund is designed to provide the patient, commercially-focused capital that allows Irish companies to grow through that transition without moving. For Irish founders and SME owners with genuine scale ambitions, this is the most significant new financial instrument in Budget 2027.
CGT Entrepreneur Relief
The CGT Revised Entrepreneur Relief — which taxes qualifying gains from the disposal of business assets at 10% rather than the standard rate, up to a lifetime limit — was enhanced in Budget 2026 from €1 million to €1.5 million. Budget 2027 did not increase the lifetime limit further, though KPMG and A&L Goodbody confirmed that the relief remains available at the €1.5 million threshold and will now apply against the new 31% headline rate rather than 33% for disposals above the relief threshold. Industry bodies had called for further increases and the possible introduction of CGT rollover relief — the ability to reinvest the proceeds of a qualifying business sale into a new venture without triggering an immediate CGT liability. Rollover relief was not introduced in this budget.
Inheritance Tax — Thresholds Increased
Capital Acquisitions Tax thresholds were increased for gifts and inheritances taken on or after 7 October 2026. The Group A threshold — covering gifts and inheritances from parent to child — increased from €400,000. Group B and Group C thresholds also rose. The specific revised figures will be confirmed in the Finance Bill next week, according to A&L Goodbody. For family business owners planning succession, the increased CAT thresholds provide meaningful planning headroom — making it more financially viable to transfer a business to the next generation without triggering a significant tax liability at the point of transfer.
Simplifying Tax Administration
The budget included commitments to simplify tax administration for businesses — including a review of the various grant schemes, enterprise tax incentives and business development programmes currently available, with the stated intention of prioritising simplification and ease of access. The Enhanced Reporting Requirements for payroll — which practitioners including Philip Lee had flagged as a disproportionate administrative burden for smaller employers — were flagged for review. Corporation tax administration changes were also confirmed, with adjustments to preliminary tax rules to provide greater flexibility and reduce uncertainty for Irish companies.
Pillar Two Global Minimum Tax
Ireland will amend its Pillar Two legislation following the OECD agreement on the Side-by-Side Package reached in January 2026. This is a technical but commercially significant update for the multinational sector — maintaining Ireland’s compliant implementation of the global minimum tax framework while incorporating the flexibilities agreed at OECD level earlier this year.
Personal Investment Account: A Structural Change
The new Savings and Investment Account, confirmed in Budget 2027 and based on models from Sweden and the UK, is one of the most structurally significant measures in the package for business owners and investors. The account is available to Irish tax residents aged 18 and over and carries a tax-free annual contribution threshold with a flat rate applying above it. Grant Thornton described it as “one of the most significant reforms to personal investment policy in Ireland in decades.” For business owners who have been holding capital in deposit accounts attracting DIRT — and for the broader Irish public who have historically under-invested relative to European peers — the PIA creates a new, more tax-efficient pathway to long-term investment that did not exist before Tuesday.
The Reaction from Business Representative Bodies
The reaction from the business community captured a consistent theme: welcome for the direction, frustration that more wasn’t done. Grant Thornton’s post-budget analysis said the budget “falls short of the level of ambition required to strengthen Ireland’s long-term competitiveness and build a more resilient indigenous enterprise base.” KPMG noted that CGT and succession planning “should form part of a coherent enterprise framework” — flagging that the measures in Budget 2027, while positive individually, do not yet constitute the connected package across the business lifecycle that the indigenous enterprise sector requires. Azets Ireland CEO Neil Hughes, who had said ahead of the budget that domestic enterprise had been “treated as an afterthought” for too long, described the enterprise measures as a step in the right direction.
For Consumers: What Changes in Your Pocket
The personal tax measures in Budget 2027 are the most directly felt changes for workers and households — and for most, they will result in a modest improvement in take-home pay from January 2027, partially offset by the PRSI increase that has already taken effect.
The standard income tax rate band was raised by €2,500, from €44,000 to €46,500 for a single person — meaning workers earning above €44,000 will pay 20% rather than 40% tax on the additional €2,500 of income. The personal tax credit, employee tax credit and earned income credit each increase by €125, from €2,000 to €2,125. The Home Carer Tax Credit rises by €100, to €2,050. The USC second band ceiling rises by €1,600, to €30,300, specifically to ensure minimum wage workers remain on lower USC rates when the minimum wage increases. The minimum wage itself rises by €0.79 to €14.94 per hour from 1 January 2027.
For a worker on €50,000, the combined effect of the band increase, credit changes and USC adjustment produces a net take-home improvement of approximately €187 per year — or roughly €3.60 per week — before the PRSI offset is factored in. The PRSI increase from 4.2% to 4.35%, which took effect on 1 October 2026, partially reduces the benefit of Tuesday’s income tax changes for everyone on PAYE.
The Rent Tax Credit was increased — the specific revised figure to be confirmed in the Finance Bill. Mortgage Interest Tax Relief was not extended and is confirmed to expire at the end of 2026. A boiler scrappage scheme was confirmed, supporting households replacing old fossil fuel heating systems. The €600 home battery grant and the extension of the solar panel grant to homes built before 2025, both announced on 29 September, remain in place. VRT relief for electric vehicles was extended for two years to the end of 2028. The flat-rate VAT compensation for unregistered farmers increases to 4.8% for 2027.
On childcare, the government’s commitment to cap costs at €200 per month per child was advanced — with the specific step for 2027 to be confirmed in the Finance Bill, with the full cap expected to be phased in over the government’s term.
The Bottom Line
Budget 2027 delivered what it promised and, in some areas, more. The CGT cut, the ISIF scale-up fund, the new Personal Investment Account and the increased CAT thresholds give Irish businesses and investors a more competitive tax environment than existed before Tuesday — while not yet reaching the structural ambition the business community has been calling for. For workers and consumers, the income tax band increase, credit improvements and USC adjustment deliver a modest real-terms improvement in take-home pay from January 2027, partially offset by the PRSI rise already in effect. The Finance Bill next week will confirm the precise figures on several measures flagged but not fully quantified in Tuesday’s speech.