Budget 2027: What to Expect

Simon Harris’s first Budget as Minister for Finance comes at a time of strong domestic economic performance but continued international uncertainty. Ireland remains in a relatively strong fiscal position, with high employment, resilient domestic demand and significant corporation tax receipts. However, the international environment remains challenging, with ongoing geopolitical tensions, volatility in energy markets and continuing uncertainty around global trade, in particular US trade policy. Ireland’s reliance on a relatively small number of large multinational companies for a significant proportion of corporation tax receipts also remains a key risk to the public finances. Against this backdrop, the Government has signalled a shift from broad, one-off cost-of-living supports towards targeted, sustainable investments that “make work pay” and strengthen long-term capacity.

In the Summer Economic Statement, the Government indicated an overall Budget package of €8.5bn, comprising €7bn of additional expenditure and €1.5bn of new taxation measures. The Minister has made clear that Budget 2027 will focus on rewarding work and ensuring that workers retain more of their income. Following the decision not to increase the main income tax bands in Budget 2026, we expect the Minister to increase the threshold at which individuals move from the 20% to the 40% income tax rate, thereby addressing some of the impact of fiscal drag as wages have increased.

Income Tax and Personal Investment

The Minister has also placed a strong emphasis on encouraging households to save and invest. The Budget is expected to provide further detail on the proposed new Personal Investment Account, including the annual contribution limits and tax-free growth thresholds. There has also been continued political pressure for changes to Capital Acquisitions Tax thresholds, although the extent to which these will feature in Budget 2027 remains uncertain.

Ireland’s Competitiveness and Economic Priorities

The challenge for the Government will be to use the available fiscal capacity wisely whilst addressing the structural issues which continue to constrain Ireland’s competitiveness. Housing supply, infrastructure delivery, energy costs and the availability of capacity for business investment remain significant issues for the Irish economy. With the economy performing strongly, the opportunity exists to make targeted improvements to the tax system, encourage households to make better use of their savings and invest for the future. However, the Minister will seek to ensure that today’s tax and spending decisions do not create difficulties for the public finances when economic conditions become less favourable.

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Disclaimer: While every effort has been made to ensure the accuracy of information within this publication is correct at the time of going to print, RBK do not accept any responsibility for any errors, omissions or misinformation whatsoever in this publication and shall have no liability whatsoever. The information contained in this publication is not intended to be an advice on any particular matter. No reader should act on the basis of any matter contained in this publication without appropriate professional advice.