Budget 2026 was announced today with a background of continuing uncertainty in the world economy. The Minister for Finance set out the need for a Budget that builds on the resilience of the Irish economy and supports growth but in a fiscally responsible way. There have been a number of instances where the Government has been warned on the level of spending and the reliance on corporation tax receipts. As a result of this, it appears that the tax package of this Budget has been restricted to €1.3bn.
There is a real focus on the property sector to increase the supply of and access to housing. This includes mainly targeting site owners by increasing tax on retaining land and reducing tax on the sale of apartments, in particular. A rate of 9% is to be applied to the sale of apartments and an increased corporation tax deduction for costs of development of apartments.
For individuals in general, other than increases in social welfare payment, there were few measures to support cost of living increases.
For businesses in general, the Budget focuses on encouraging Irish business and to expand internationally. The announcement includes a 9% VAT rate for hospitality business from July 2026, an increase in the R&D Tax Credit to 35%, changes to specific tax treatments such as participation exemption for dividends, interest payments and receipts and the withholding tax regime. It should be noted there is a plan to introduce a domestic business-to-business digitalisation on the issue of VAT invoices.
Finally, in a welcome change to the capital gains tax regime and to encourage entrepreneurship, the lifetime limit applying to the 10% capital gains tax rate for certain disposals of business assets including shares in a trading company (Revised Entrepreneur Relief) is increased from €1m to €1.5m.
To view our full breakdown of Budget 2026, CLICK HERE.
For further information, get in touch:
Michael O'Leary, Tax Partner
Deborah Drought, Tax Partner
