Budget 2027: What it means for investors, business owners and professionals

Budget 2027, announced on 6th October 2026, has been framed by the Government as targeting ‘families, workers and helping people with rising costs’ as individuals are facing global uncertainty and increased energy prices.

The total Budget package is expected to amount to €8.65 billion, comprising:

• €7 billion in additional public spending; and
• €1.65 billion in tax reductions.

Here’s what Davy’s experts said about Budget 2026:

Economy and business supports: 

Kevin Timoney, Chief Economist at Davy, said: 

“The Irish economy is growing strongly and broadly again this year, while the public finances are in fundamentally better shape than often portrayed. Ireland's macroeconomic and fiscal situation affords the Government choices that many other countries simply haven't got. This is especially true in an environment with rising interest rates." 

“Of course, pressure on some households and businesses exist from higher energy and day-to-day costs. An increasingly fraught political climate of late has also been evident in Ireland's public discourse, with protests and strike action notably more prevalent this year."

“However, at the same time, it must be recognised that a lot of Irish households and businesses are capable of navigating challenges like those experienced this decade with relative ease, helped by strong financial balance sheets and relatively low tolerance for risk since the global financial crisis. This has underpinned Ireland's strong economy, and we expect this will remain the case over coming years."

“Most of the public capital spending plans until 2030 are already decided under the National Development Plan, while the current spending strategy seeks to balance efficiency gains with the need to keep pace with Ireland's fast-growing economy."

“The Government's choices in this Budget therefore primarily relate to the tax package, including the introduction of an Irish Investment Account. Last year, we welcomed the Government's focus for the tax package on boosting housing supply and reducing costs for the hospitality sector. For Budget 2027, there is a more "back to basics" feel to the measures which seek to neutralise the effect of wage growth on average household tax rates, while also working toward long-term economic priorities for competitiveness and investment especially."

“Targeted measures aimed at reducing energy costs and supporting lower-income households are essential given current pressures. For businesses, the Budget contains some positive steps, such as measures to reduce administrative complexity for corporation tax, the cut to the standard rate of capital gains tax to 31%, the enhancement of the R&D tax credit, the extension of the employment investment incentive, the startup capital incentive, the startup relief for entrepreneurs, and the relief for investment in innovative enterprises, also known as the angel investor relief and corporation tax small company startup relief. The launch of a new €1 billion investment programme by the Ireland Strategic Investment Fund (ISIF) will also help Irish-owned businesses to invest and grow."

Unlocking retail investment

James Costello, Head of Davy's Portfolio Management Group, said:

On Savings and Investment Accounts (SIAs):

“The new Irish Investment Account has the potential to be one of the most important long-term reforms in Budget 2027. Ireland has a significant pool of household savings on deposit, and a simple, accessible account could help more people invest for their future while supporting a broader culture of long-term saving and investment.”

“The 12,000 annual limit and 50,000 lifetime limit is perhaps lower than many investors might have hoped for, it will make a meaningful difference to middle-income investors to invest in a simple-to-use account, with no IUT and deemed disposal, and only a 1% flat tax only on holdings above the threshold. A clear launch date of 1 July 2027 will allow the industry and government the time to market the new accounts correctly and allow providers to be set up to deliver according to the account’s design criteria in a coordinated manner from launch."

On deemed disposal and investment undertaking tax:

“It is welcome that deemed disposal will not apply within the new accounts. More broadly, the reduction in the fund exit tax rate from 38% to 35% is a step in the right direction, but it will not resolve the issues caused by taxing gains before they are realised. It was positive to hear that Government intends to make further cuts to IUT in future budgets. We hope to ultimately see a clear and credible pathway to the full removal of deemed disposal and a full equalisation of investment undertaking tax with capital gains tax, which will create a product-neutral investment tax system, in Budget 2028 and beyond. "

The tax environment

Conor Linehan, Financial Planning Tax Specialist, said:

Income tax, USC and other personal tax measures:

“The personal tax package announced in Budget 2027, set to save individuals up to €750 and couples up to €1,500 represents a positive outcome for taxpayers and should provide meaningful support to many working households. Individuals should consider how the changes affect their take-home pay and wider financial plans.”

Capital Acquisition Tax (CAT):

“The increase in the Group A Capital Acquisitions Tax threshold, which covers transfers from parents to their children, to €420,000, and the smaller increases to Group B and C, are positive steps and recognises the impact that rising property values have had on inheritances. However, the increase is relatively modest when viewed against the scale of house-price appreciation over the past decade. We believe there remains a strong case for a broader review of the CAT regime to ensure it remains fair, predictable and appropriate in today's environment.”

Capital Gains Tax (CGT):

“We were pleased to see a decrease in standard rate of CGT from 33% to 31%. This will be welcomed by many Irish business owners and entrepreneurs who see CGT as an important lever in encouraging investment, risk-taking and business growth. This is a positive first step that should be followed by further cuts in the coming years to ensure Ireland’s CGT regime is more competitive in an international context. This cut to support entrepreneurship, competitiveness and long-term economic growth, will help to secure Ireland’s economic prosperity."

Pensions and retirement planning:

Fergal Roche, Pensions Director, said:

"There were no changes to private pensions announced in Budget 2027. However, the Tánaiste noted that changes to Defined Benefit valuation factors will be outlined in the finance bill to take effect from 1st January 2027."

This change could have the most impact for public service schemes. Based on a finance bill amendment from last year this proposal could reduce the tax value of these pensions by circa 40%.

This was a recommendation from de Buitleir report and we are hopeful that other recommendations could also be included in the Finance Bill. The recent tax strategy papers stated that the department were also considering:

• allowing for Chargeable Excess Tax to be paid over a longer period,
• either removing or extending the option to encash pension entitlements early;
• considering the interaction of the SFT and Pension Adjustment Orders and
• ensuring individuals have access to information regarding their CET liability.

Banking:

Diarmaid Sheridan, Head of Research, said: 

“The Bank Levy has been extended for another year, with a yield of €200 million. The final design and allocation of the levy will be important in assessing its impact on the sector, and we will review the detail once the Finance Bill is published."

Budget 2027: the Davy view

Budget 2027 presented a challenge for a government that is aiming to improve the business environment through structural tax reform over the next several years. However, political and economic realities, particularly affordability challenges exacerbated by global economic events, meant that not all measures were possible this year.

While the scale of tax reform passed is less than what we called for in our Pre-Budget Submission, there are positives in terms of the direction of travel on personal and business taxation. We hope to see continued reform over the lifetime of this government aimed at supporting Irish-owned businesses, unlocking investment opportunity for citizens and improving infrastructure and affordability.