Budget 2027: What it means for you
If you’re wondering how Budget 2027 affects household finances, we explain what changed and what it means for you and your family.
Budget 2027 is worth €8.5bn overall, with €7bn in additional public spending and €1.65bn in tax reductions.
The Budget puts more money back into workers’ pockets through Income Tax, USC and tax credit changes, alongside targeted support for energy, housing, welfare and childcare.
Here’s a summary of the main announcements and what they mean for you.
Energy costs
Energy costs have climbed again in 2026, with households facing higher electricity, fuel and home heating bills. This year’s Budget focuses on targeted support, with measures to curb further fuel and heating price increases.
What’s changed?
The Government announced a range of measures to help with energy and fuel costs.
What it means for you
- If you qualify for Fuel Allowance, the €5 weekly increase will mean an extra €140 over the 28-week season.
- There will be no universal electricity credit applied to household bills this year.
- If you drive, the temporary fuel excise reductions will stay in place through the winter, delaying planned increases in petrol and diesel prices until 2027.
- If you heat your home using oil, the lower Carbon Tax rate could cut around €40 to €45 from the cost of a 1,000-litre fill, if the full reduction is passed on.
- If you’re upgrading your home, the new grants could reduce the cost of battery storage or replacing an older oil or kerosene boiler with a heat pump.
Housing costs
Housing costs remain high for both renters and homeowners, with affordability still a major challenge for people buying, renting or repaying a mortgage. Budget 2027 includes further support for renters and first-time buyers, alongside changes aimed at bringing more homes and rooms into use.
What’s changed?
What it means for you
- If you’re renting, the higher Rent Tax Credit will reduce your annual Income Tax bill by up to €1,150 for an individual or €2,300 for a jointly assessed couple.
- If you’re buying your first home, you can now claim up to €35,000 through the Help to Buy scheme if you meet the qualifying conditions.
- If you rent a room in your home, you’ll be able to earn up to €16,000 per year in qualifying rental income tax-free.
- The new derelict property tax is aimed at encouraging vacant and derelict homes back into use.
- If you qualify for Mortgage Interest Tax Relief, you can still claim relief on eligible mortgage interest paid in 2026, but no further extension has been announced for 2027.
Transport costs
Motorists have faced higher petrol and diesel prices this year, while public transport fares are set to rise from January 2027. The Government has extended fuel supports, EV relief and investment in public transport.
What’s changed?
What it means for you
- If you drive, the temporary fuel excise reductions will stay in place through the winter, delaying planned increases in petrol and diesel prices.
- If you use public transport, adult fares will rise from January 2027. The Dublin 90-minute Leap fare will increase by 30c from €2 to €2.30.
- The additional funding should provide more public transport services across the country.
- If you’re buying an electric vehicle, you can continue to claim up to €5,000 in VRT relief for another two years.
Work, Taxes and Pensions
Workers will take home more from January, with changes to Income Tax, USC and tax credits. The minimum wage and State Pension will also rise in 2027.
What’s changed?
Pensions
The MyFutureFund auto-enrolment pension scheme will continue in 2027. Employee contributions will remain at 1.5% of gross salary, with employers contributing 1.5% and the State adding 0.5%.
The maximum weekly State Pension (Contributory) rate for people under 80 will increase by €10 to €309.30 from January 2027.
Inheritance and investments
- Inheritance tax: The Group A tax-free threshold for gifts and inheritances from parents to children will increase from €400,000 to €420,000. The Group B threshold will rise from €40,000 to €44,000, while Group C will increase from €20,000 to €22,000.
- Personal Investment Fund: A new Personal Investment Fund will allow people to invest up to €12,000 per year. Investments can build to €50,000 before a 1% tax applies to the amount above that threshold.
What it means for you
- A single worker earning €50,000 could be around €750 better off over a full year through the Income Tax and USC changes.
- A couple earning €100,000 between them could gain around €1,500 over a full year.
- If you pay the higher rate of Income Tax, more of your earnings will be taxed at the lower 20% rate from January.
- The €125 increase in the main tax credits will further reduce the amount of Income Tax paid by qualifying workers.
- If you qualify for the Home Carer Tax Credit, you’ll receive an additional €100 in tax relief.
- The USC change will help ensure full-time workers on the new minimum wage stay outside the higher USC rate.
- If you work 37.5 hours per week on the minimum wage, the rise to €14.94 per hour will mean around €29.63 extra per week, or €1,541 per year before tax.
- If you receive the State Pension, you’ll get an extra €10 per week from January 2027.
Education & Childcare
Childcare and college costs can take a sizeable chunk out of family budgets. This year’s Budget includes a new childcare fee cap, wider supports and further reductions in third-level costs.
What’s changed?
What it means for you
- If you pay for full-time childcare, the €550 monthly cap could save families currently paying the highest fees around €2,000 per year from September 2027.
- More families will qualify for the maximum childcare subsidy from September 2027 due to the higher €38,500 income threshold.
- If you’re a qualifying childminder, you’ll be able to earn up to €20,000 per year tax-free.
- If you’re attending third level, your annual Student Contribution Fee will be €150 lower on a permanent basis.
- If you have two or more children attending higher education, you may find it easier to qualify for a SUSI grant.
- Families with more than one child in third level will also benefit from additional support with college costs.
- Children with additional educational needs should benefit from further investment in teachers, SNAs and therapists.
Benefits
Social welfare recipients will see another rise in weekly payments in 2027, alongside new and increased supports for pensioners, carers, families and people with disabilities.
What’s changed?
State pension
The State Pension is paid to people from the age of 66 who have paid enough PRSI.
From January 2027, the maximum weekly State Pension (Contributory) rate for people under 80 will increase by €10 to €309.30.
What it means for you
- If you receive a weekly social welfare payment, the €10 increase will mean an extra €520 over a full year.
- If you receive the State Pension, you’ll get an extra €10 per week from January 2027.
- If you qualify for Fuel Allowance, the €5 increase will provide an extra €140 over the 28-week season.
- If you’re single and aged over 66, you may find it easier to qualify for Fuel Allowance due to the higher €641 weekly income threshold.
- If you’re a carer, the higher income disregard will allow you to earn more while still qualifying for Carer’s Allowance.
- Families receiving Child Support Payment will get an extra €6 per week for each qualifying child.
- More working families could qualify for Working Family Payment due to the €30 increase in the weekly income thresholds.
- If you qualify for the new cost-of-disability payment, you’ll receive an annual €500 payment.
- If you receive the Living Alone Allowance, you’ll get an extra €3 per week.
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