WITH ALMOST EXACTLY a month to go until Budget 2027, plenty of kites have already been flown by government ministers. 

From reduced childcare fees, a possible excise cut on alcohol and disagreement over what to do with the carbon tax, there are a lot of decisions yet to be made.

Budget 2027 will be laid before Dáil Éireann by Finance Minister Simon Harris and Public Expenditure Minister Jack Chambers on Tuesday 6 October. 

It will be Harris’s first budget in the finance brief, and no doubt he will be hoping it is well received by the general public after last year’s left workers worse off.  

Here’s everything we know about it so far: 

For 2027, the overall government expenditure ceiling is €125.5 billion. This is made up of €105.2 billion of current spending and €20.3 billion of capital spending. 

The total budget package this year will consist of €8.5 billion, made up of €7 billion in additional public spending and a tax package of €1.5 billion in new measures.  

This amounts to a rise in public spending of 5.9% on last year.

The government has said the focus this year will be on “making work pay”. 

Specifically, it has said the budget will include measures to improve public services, boost competitiveness through infrastructure and invest in the Future Ireland Fund (the sovereign wealth fund set up in 2024 to help manage spending for future costs like climate change and an ageing population).

Income tax cuts

Over the summer, Harris has said that one of his priorities for this year’s budget is to put more money back in ordinary workers’ pockets via a tax package and changes to income tax bands.

Speaking in June, he said he is “crystal clear” that there must be a personal income tax package.

“There wasn’t last year. If there isn’t, it means people end up effectively paying more tax next year,” the Tánaiste said at the time. 

While the details are not yet confirmed, he has said he is working to increase the threshold at which people pay the higher rate of income tax. Currently, it sits at €44,000.

New savings scheme

Alongside income tax cuts, the other guarantee in the budget is Harris’s new personal investment accounts.

These have been well flagged by Harris, and what we know so far is that they will have a tax-free threshold, with a “low flat-rate tax” applying annually to anything above that threshold.

The Tánaiste has also confirmed that the controversial 38% deemed disposal tax rate will not apply to money in these this account.

In a video posted to social media this week, he also said that he “will take a broader look at deemed disposal overall in the coming weeks too.”

Cuts to childcare costs

The finance minister has also pointed to cutting childcare costs as another “lever” the government can use to help people with the cost of living.

Reducing childcare costs to a maximum of €200 per month per child is one of the core promises that have been made by this government, but it has continuously stressed that this will be done on a phased basis over its five-year term.

For now, just how much cheaper it will get as a result of Budget 2027 remains to be seen.

Changes to carbon tax

Harris and Taoiseach Micheál Martin were forced to play down talks of a rift between them this week over a possible delay to carbon tax increases in this year’s budget. 

It came after the Irish Independent reported that a slowdown of carbon tax hikes for the rest of the Coalition’s lifetime is on the table in budget talks.

The Taoiseach has argued that the increases in the tax are baked into the government’s planned spending, but Harris has argued that, while he supports the tax in principle, it was set before two “massive global shocks”, i.e. the war in Ukraine and the war in the Middle East. 

“The Government needs to consider all of these things,” Harris said. 

Renters and home buyers

The Journal understands Housing Minister James Browne is keen to see an increase in the rent tax credit, which currently sees renters receive a tax rebate up to €1,000 annually.

However, while there has been some talk of tweaks to the Help to Buy scheme, the fear within the Department of Housing is that any major changes will lead to further house price inflation. 

Speaking to The Candidate podcast, Harris ruled out any change to stamp duty for first-time buyers, despite the Taoiseach saying in April it was worthy of consideration. 

Stamp duty applies to buyers when they purchase a home at a rate of 1% on the first €1 million of the home’s purchase price, rising to 2% from €1 million to €1.5 million, and 6% on any amount thereafter. 

Inheritance tax

There has been significant pressure on the Taoiseach and Tánaiste from their backbenchers to make changes to the inheritance tax system for some time.

Specifically, there have been sustained calls to relax the tax burden for people who inherit a property from someone who isn’t their parent.

Last year, Micheál Martin and Harris both said they had an issue with the current inheritance system, dubbing it unfair. 

However, Department of Finance officials have warned that proposals to overhaul inheritance tax rules for people without children would come at a “significant” cost to the Exchequer and leave far fewer people liable to pay the tax.

Earlier this summer, Martin said he was “very conscious” of the position of people without children who have “worked hard all their lives” and want to leave an inheritance to nieces, nephews or other family members. Harris has indicated he wants the threshold for children to move towards €500,000.

For now, though, we will have to wait and see what is decided next month.

Excise cut on alcohol

This week, the Irish Examiner reported that one of Enterprise Minister Peter Burke’s key asks for the budget is a cut to excise duty on alcohol in an effort to help support pubs and restaurants.

While a reduced 9% Vat rate for hospitality was agreed as part of Budget 2026 and introduced in July, it does not apply to alcoholic drinks.

When asked for his view on it during the week, Taoiseach Micheál Martin did not give too much away, but he didn’t rule out the measure. 

“We will look at different sectors in the round,” he said, adding that no specific decisions on excise cuts have been agreed yet.

Energy 

Despite the existing excise cuts on petrol and diesel, the Tánaiste has signalled that the government will roll out supports to households to help them transition away from fossil fuels, which could be in the form of grants for the likes of solar panels. 

He said governments must now incentivise people to make the changes needed to reduce reliance on imported fuels, to reduce their energy bills.

Meanwhile, Energy Minister Darragh O’Brien has previously indicated that those in energy arrears could be targeted to get additional supports to move to renewable energy. 

Vape tax increase

The Irish Times reported last month that an increase in the tax on vapes might be on the cards. 

Harris said the tax is collected on a self-assessment basis and since its introduction last November, more than €22 million has been collected. 

Political leaders have been strong in their condemnation of vapes and have introduced legislation recently to curtail the market. This could be an easy win and a money generator for the government. 

Includes reporting from Christina Finn