Budget 2027 Ireland: What It Means for Your Savings, Pension and Tax

Budget 2027 is mostly good news for people who save, invest and run their own business: a new investment account opens on 1 July 2027, the tax on investment funds and life assurance investment products falls from 38% to 35% from 1 January 2027, and the standard rate of Capital Gains Tax falls from 33% to 31%.

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The good news

Seven areas improve, and the new investment account is the biggest shift for savers in years.

New investment account: a tax-free home for new money, from 1 July 2027

• Who offers it: banks, investment firms and insurers. The provider, not you, handles the tax administration.
• Tax inside the account: no Capital Gains Tax, dividend withholding tax, Investment Undertaking Tax or Life Assurance Exit Tax, and the eight-year deemed disposal rule does not apply.
• The Minister’s example: a balance of €52,000 would owe €20 for the year.
• Impact: for most savers, new money invested up to the €12,000 yearly limit should face little or no tax for the first several years.

Investment funds and life assurance products: exit tax falls to 35%, from 1 January 2027

• What changes: Investment Undertaking Tax and Life Assurance Exit Tax fall from 38% to 35%.
• Who it covers: Irish and equivalent offshore funds, and Irish and foreign life assurance products.
• Impact: on a €50,000 gain, the tax falls from €19,000 to €17,500, a saving of €1,500 (our arithmetic, not an official figure).
• To confirm: the Irish Times reports the cut also applies to deemed disposal. We will confirm that in the Finance Bill.

Capital Gains Tax: standard rate falls two points

• What changes: the standard rate falls from 33% to 31%.
• When: the rate is reported to apply from 7 October 2026 and Revenue has yet to confirm.
• Impact: on a €100,000 gain, €2,000 less tax.
• Who benefits most: company directors selling shares, landlords and anyone holding shares directly.

Income tax for single people: more of your pay taxed at 20%

• What changes: the point where the 40% rate starts rises by €2,500 to €46,500.
• Credits: the Personal, Employee and Earned Income Credits each rise by €125, so self-employed people gain the same credit increase as employees.
• Impact: the Minister says someone earning €50,000 will pay over €700 less in income tax and Universal Social Charge.

Income tax for married couples and civil partners: proportionate increases

The Minister said the cut-off point rises “with proportionate increases for married couples and civil partners” but gave no figures in his speech. Applying the same €2,500 increase to the current bands gives the figures below. They are our arithmetic and will be confirmed in the Finance Bill.

What changes

• Single person: €44,000 in 2026, rising to €46,500 in 2027.
• Couple, one income: €53,000 in 2026, rising to €55,500 in 2027.
• Couple, two incomes (maximum combined): €88,000 in 2026, rising to €93,000 in 2027.
• Personal Tax Credit: doubles for a couple, so it should rise by €250 to €4,250.
• Employee and Earned Income Credits: each PAYE or self-employed spouse or civil partner gets the €125 increase.

Estimated impact

• Two earners, each on €50,000 or more: about €1,500 a year better off, made up of €1,000 from the wider bands and €500 from the credits. This is in line with the Irish Times figure for a €100,000 combined income.
• One earner on €60,000: about €875 a year, made up of €500 from the wider band and €375 from the credits.
• One earner below the old €53,000 limit: about €375 a year, from the credits only, because all of that income was already taxed at 20%.
• For comparison, a single person above €46,500: up to €750 a year.

Smaller changes

• Home Carer Tax Credit: rises by €100. Estimated saving: €100 a year.
• Renting couples: a rent tax credit of up to €2,300. Estimated saving: up to €300 a year more than in 2026.
• State Pension: where one spouse receives an increase for a qualified adult, that increase also rises proportionately. Estimated saving: around €350 a year, our rough estimate until the rates are published.

Inheritance tax, Help to Buy and State Pension: higher limits and payments

• Inheritance tax (Capital Acquisition Tax): the parent-to-child threshold rises €20,000 to €420,000, worth up to €6,600 per child at the current 33% rate. The other two thresholds rise to €44,000 and €22,000.
• Help to Buy: now refunds up to €35,000.
• State Pension (Contributory): rises €10 a week to €309.30, about €520 a year.

Business owners: employer PRSI and start-up reliefs

• Employer Pay Related Social Insurance (PRSI): the weekly threshold rises from €552 to €600 for 2027, which the Minister puts at €650 to €700 a year per employee below the threshold.
• Start-up and investor reliefs: the Employment Investment Incentive, Start-Up Capital Incentive, Start-Up Relief for Entrepreneurs and Angel Investor Relief are all extended, subject to EU State aid approval.

The bad news, and what did not happen

The catches are real, and for pensions the most important point is what the Budget left out.

New investment account: the 1% charge falls on the balance, not the gain

• The charge: above €50,000, the account is charged 1% a year on the value of the account, even in a year when it loses money.
• Impact: a balance of €80,000 owes €300 a year whether the account rose or fell.
• The limit: the €12,000 yearly limit means it takes years to build a large balance.
• Not yet known: the Minister’s speech does not say whether existing investments can be moved in.

Existing funds and life assurance products: deemed disposal is not scrapped

• What was said: work will continue on the rate of tax, deemed disposal and the administrative burden for existing investments.
• Impact: funds you already hold remain subject to the eight-year deemed disposal rule.
• Funds versus direct shares: at 35% against 31% for Capital Gains Tax, investing through a fund is still taxed more heavily than holding shares directly, although the gap narrows from five points to four.

Pension contributions (AVCs and PRSAs): a wider 20% band trims some tax relief

• Why: pension tax relief is worth your marginal rate, and €2,500 more income is now taxed at 20% rather than 40%.
• What changes: up to €500 a year of relief on an annual voluntary contribution (AVC) or Personal Retirement Savings Account (PRSA) contribution moves from 40% to 20%, for people whose contributions would have reached that slice. For a couple, this applies to each spouse or civil partner.
• Impact: smaller than the income tax saving the same change delivers, so most higher earners are still ahead. The case for contributing is unchanged, but the arithmetic is worth re-running.

Pensions (contribution relief and Standard Fund Threshold): no new incentives, and one unknown

• What was not announced: no change to pension contribution relief, AVC or PRSA rules, or Approved Retirement Fund rules.
• What was announced: the age-related valuation factors used in the Standard Fund Threshold regime will be revised from 1 January 2027, with details to follow in the Finance Bill.
• Impact: we cannot yet say whether the change helps or hurts. People with large pension funds or defined benefit entitlements should wait for the detail before making decisions.

Lower earners and Help to Buy: smaller gains

• Help to Buy: the property price limit stays at €500,000, which rules out many Dublin purchases.
• Lower earners: people earning roughly €35,000 to €44,000 gain only the €250 from the two credit increases.

What to do now

The right move depends on where you are, and none of it needs to happen this week.

• Self-employed people and company directors: before agreeing the date of any share or property sale, ask us. The new 31% Capital Gains Tax rate is reported to apply from 7 October 2026 and Revenue has yet to confirm, so check with us before you agree the date of a sale. It is also a good time to review how you take money from the company, because the employer PRSI threshold and the credits have both moved.
• Employees and professionals: you will take home more from 2027. Consider directing part of the saving into your pension through an AVC, and plan any other new saving around the account opening on 1 July 2027.
• People near retirement or with large pension funds: do not act on the Standard Fund Threshold until the Finance Bill sets out the new valuation factors. The State Pension rise to €309.30 a week is worth building into your retirement income plan.
• Anyone with existing investments or life assurance bonds: do not surrender or switch to chase the lower rate or the new account. Tax is one factor among charges, risk and your goals, and the detail is not final.
• Families: the higher inheritance thresholds and the larger Help to Buy refund may change how you plan gifts and a first-home deposit.

We can compare the new account, your pension and your existing products side by side.

Sources and what we are still confirming

All sources were published on 6 October 2026.

• Statement by Minister Harris on Budget 2027, Department of Finance
• Budget 2027: Minister Calleary secures Social Protection Package, Department of Social Protection
• Budget 2027 main points, The Irish Times
• Budget 2027 live updates, The Irish Times
• Consumers can save up to €50,000 tax free in new personal investment accounts, The Irish Times
• State pension and Jobseekers’ payments to rise by €10 per week, TheJournal.ie

Still to be confirmed when the Finance Bill is published: Revenue’s confirmation of the Capital Gains Tax start date (reported as 7 October 2026), whether existing investments can move into the new account, whether the 35% rate applies to deemed disposal events, the direction of the Standard Fund Threshold change, the exact married couple and civil partner cut-off figures, and start dates for the inheritance thresholds and State Pension increase.

Reviewed by the advisory team at Greenway Financial Advisors Ltd. · Dublin · Updated October 2026

General information for the 2026 tax year, based on the Budget 2027 announcements of 6 October 2026. Not personal advice.