Taoiseach Micheál Martin confirmed that the rent tax credit will be increased in the upcoming Budget 2027, as budget talks enter their final phase and the Coalition prepares to reveal an €8.5 billion package of tax and spending measures on Tuesday. Speaking to reporters in Dublin ahead of a Cabinet meeting, Mr Martin described the tax relief as a positive measure for tenants, noting that the primary concern remains ensuring that all eligible renters claim the benefit.
Budget Package Finalization in Government Buildings
Although most spending increases have been settled, the tax package was still being finalized at the Department of Finance and Government Buildings on Monday afternoon. The Coalition will unveil its €8.5 billion package of tax and spending measures on Tuesday following a budget process that has seen tensions flare despite predictions of significant extra spending and tax cuts. As final spending allocations are determined, the government is also considering possible relief measures for fuel excise and energy, in addition to housing tax relief.
Officials discuss raising rent tax credit limits
According to information coming out of budget negotiations, the rent tax credit may be increased, with a higher limit of €1,200 for individuals or €2,400 for civil partnerships or married couples being considered. Housing Minister James Browne has lobbied for a €300 increase to the value of the credit. The current maximum value stands at €1,000 for a single person or €2,000 for married couples or civil partners, though the higher threshold may not kick in until later in 2027. Tánaiste and Minister for Finance Simon Harris said he is positively disposed to enhancing the credit to assist households with high rental costs, though he declined to comment on specific figures during bilateral negotiations. Meanwhile, the tax-free rental income allowance will be extended to backyard cabins following Coalition encouragement through planning reforms. A stamp duty waiver for first-time buyers and changes to the amount claimed back through the Help to Buy scheme appear less likely.
Did You Know? The rent tax credit was first introduced in 2022 to assist households facing high rental costs, and the primary concern for the government remains ensuring that all eligible renters successfully draw down the benefit.
Higher income tax entry point expected to rise
The threshold for the higher rate of income tax is anticipated to move from €44,000 to €46,000, while changes to tax credits and the universal social charge are expected to provide middle-income earners with a few hundred euro in additional annual benefits. There will not be an across-the-board reduction in college fees despite suggestions over the weekend of a €250 universal cut, but parents with more than one child attending college will see greater access to subsidies. The income disregard for the carer’s allowance is set to increase from its current level of €1,000 for single carers or €2,000 for a couple, though the rise is expected to be more modest than last year. An increase is also expected on the living alone allowance, with €5 floated, alongside a separate increase on the child support payment that is expected to be less than last year’s increases of €16 weekly for kids aged 12 and up and €8 for under-eights.
Culture card scheme secures funding for rollout
Regarding the pre-budget suggestion of a youth “culture card” originally mooted at about €100, a spokeswoman for Minister for Culture Patrick O’Donovan stated that money to progress the idea has been secured. The department will now continue its work, engage with EU counterparts and the cultural sector, draw up scheme terms, and develop a framework of approved venues with an anticipated rollout by the end of next year. Extra funding has been agreed for An Coimisiún Pleanála and local authority planning departments to speed up decision-making.
Coalition prepares to reveal Budget 2027 package
When will Budget 2027 be revealed?
The Coalition will reveal the €8.5 billion package of tax and spending measures on Tuesday, following budget talks in Government Buildings and the Department of Finance.
What are the current and proposed values for the rent tax credit?
The current maximum value is €1,000 per year for a single person or €2,000 for married couples and civil partners. Discussions have floated an increase to €1,200 per person or €2,400 for a married couple or civil partnership, though this higher threshold may not take effect until later in 2027.
What changes are expected for income tax thresholds?
It is expected that the entry point for the higher rate of income tax will increase from €44,000 to €46,000, and modifications to tax credits and the universal social charge are also expected.
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