Budget 2027: What changed at midnight - and what we'll have to wait for

BUDGET 2027 APPEARS to have a little something for a lot of people, although it was far from the ‘giveaway budgets’ we’ve seen in the past.

Some key promises came to fruition, while other increases and extensions weren’t as generous as expected.

Money ministers Jack Chambers and Simon Harris increased overall government spending by €7.1 billion, bringing the total expenditure for 2027 to €125.6 billion.

Some measures have already begun. 

What kicks in today

One change that came into almost-immediate effect was a price hike for cigarettes.

A packet of 20 went up €1 at midnight, so it’s now over €20. 

Vapes will see an increase of 20c per ml (the average disposable vape contains 2ml of e-liquid) from 1 January 2027.

A 2ml disposable vape Alamy Stock Photo

Cuts in excise duty on petrol and diesel, which amount to 27 cent per litre on petrol and 32 cent on diesel, have been extended until 28 February 2027.

Meanwhile, the carbon tax rate on home heating oil and gas was cut from €63.50 to €48.50 per tonne of CO2.

For first-time buyers, the tax refund for the Help to Buy scheme has gone from €30,000 to €35,000.

The thresholds for capital acquisitions tax, which applies to gifts and inheritances, has increased for the first time since 2024.

From today, the amount a child can inherit without paying tax is rising from €400,000 to €420,000.

The threshold for siblings, nieces, nephews and some other relatives increased from €40,000 to €44,000, and for non-relatives, it’ll increase from €20,000 to €22,000.

Capital Gains Tax (CGT) has also been cut from 33% to 31% for disposals made from today.

CGT generally applies to the profit or gain made when someone sells, gives away or otherwise disposes of an asset. The reduced standard rate applies to disposals made on or after 7 October.

In third-level education, there’s been a €150 decrease in fees. While it comes into effect immediately, many students have already paid their fees for this year. However, they can request a refund in January.

Measures kicking in later

The entry band for the higher rate of income tax will increase by €2,500 next year.

People will now pay the higher rate (40%) on earnings over €46,500, rather than €44,000. There are proportionate increases for married couples and civil partners.

There’ll be a €125 increase to personal, employee, and earned income credits, and a €100 increase for the home carer tax credit.

Related Reads

From income tax cuts to another euro on cigarettes: Here are the main points of Budget 2027

Last year's package 'landed like a lead balloon' - so is anyone happy with Budget 2027?

State pension and Jobseekers’ payments to rise by €10 per week from next year

The entry threshold for the USC 3% band will also increase from €28,700 to €30,300.

• You can use The Journal’s calculator to figure out what the tax changes will mean for you.

Core social welfare payments, including the State Pension, Disability Allowance, Carer’s Allowance, One-Parent Family Payment and Jobseeker’s Allowance, will see a €10 weekly increase from next year.

There will be an additional €6 per week for the child support payment, which is paid alongside qualifying social welfare payments. There was no change to child benefit. 

The monthly cap on childcare fees for kids up to senior infants will be €550. That’s down from €735, so a 25% cut for parents of children in full-time daycare. However, this won’t take effect until next September.

Alamy Stock Photo

From January, there will be a €5 increase in the fuel allowance, bringing the weekly payment to €43.

The rent tax credit will increase by €150, bringing the value of the credit to €1,150 for a single person and €2,300 for a couple.

The threshold of tax-free income landlords can earn from the rent-a-room scheme will also increase from €14,000 to €16,000.

The scheme has now been extended to garden cabin rentals between 32 and 45 square metres that were built after 27 July 2026.