Budget 2027: Key Legal Implications for Businesses, Employers, Property Owners and Families

Budget 2027 contains a range of measures aimed at supporting business growth, increasing housing supply, encouraging investment and easing cost of living pressures. While many of the announcements focus on taxation and public expenditure, they also have important legal and practical implications for businesses, employers, property owners and individuals planning for the future. The measures announced span business investment, innovation, taxation, housing, employment and succession planning, with implications for both public and private sector organisations.

In this collaborative article, members of Comyn Kelleher Tobin LLP’s Employment, Corporate & Commercial, Real Estate and Property teams highlight some of the key Budget 2027 measures and consider their potential impact on businesses, employers, property owners and individuals.

Supporting Business Growth and Investment

A key theme of Budget 2027 is supporting Irish businesses to grow, scale and compete internationally. A headline measure is the introduction of a new €1 billion business scaling programme through the Ireland Strategic Investment Fund (ISIF), intended to improve access to growth capital for Irish businesses seeking to expand domestically and internationally while remaining headquartered in Ireland.

The Budget also extends a number of investment and entrepreneurship reliefs, including the Employment Investment Incentive (EII), Start-Up Capital Incentive, Start-Up Relief for Entrepreneurs and Relief for Investment in Innovative Enterprises, also known as Angel Investor Relief. The corporation tax start-up relief for qualifying small companies is also being extended.

These measures are intended to encourage entrepreneurship, attract private investment and improve access to funding for start-ups and growing businesses. They also form part of the Government’s continued focus on supporting indigenous enterprise and long-term economic growth, particularly for businesses considering expansion or external investment.

Innovation, Intellectual Property and Corporate Tax Measures

Businesses engaged in research and innovation will welcome a number of enhancements to the Research and Development (R&D) Tax Credit regime.

Budget 2027 increases the limit for subcontracted R&D expenditure to third-level institutions from 15% to 20%, increases the cap for certain third-party subcontracted expenditure from €100,000 to €200,000 and increases the first-year payment threshold from €87,500 to €105,000. These changes are designed to improve cashflow and encourage continued investment in research and development, particularly among smaller and scaling companies.

The Budget also provides for a further five-year extension of the Knowledge Development Box (KDB) regime, which is intended to support the development and commercialisation of intellectual property from Ireland. This extension provides greater certainty for businesses investing in innovation and reinforces Ireland’s attractiveness as a location for intellectual property development.

Amendments have also been announced to corporation tax provisions affecting smaller companies, including increased qualification thresholds. These measures are intended to support smaller enterprises and reduce administrative burdens.

A further noteworthy development is the introduction of a new Personal Investment Account regime, expected to commence on 1 July 2027. Individuals will be permitted to invest up to €12,000 annually, subject to an aggregate tax-free threshold of €50,000. Investments held within these accounts will benefit from favourable tax treatment, including exemptions from Capital Gains Tax, certain fund-related taxes and the deemed disposal regime. While primarily aimed at individual investors, the measure may contribute to greater capital formation and investment activity across the Irish economy.

What Budget 2027 Means for Employers and Employees

Several measures will have practical implications for employers and employees.

The entry point to the higher rate of income tax will increase by €2,500, the main personal tax credits will increase by €125 and the ceiling for the second USC band will increase from €28,700 to €30,300. Together, these measures should increase net take-home pay for many workers.

The Rent Tax Credit will increase by €150 for single claimants and by €300 for jointly assessed couples. Tax relief available under the childcare services scheme will also increase from €15,000 to €20,000. These measures are intended to assist households facing ongoing cost of living pressures.

From an employment perspective, the changes may assist employers seeking to attract and retain staff. However, housing affordability, childcare costs and wider labour market pressures are likely to remain significant considerations for employers and employees. Continued investment in public services, healthcare and education may also contribute to ongoing competition for skilled workers across multiple sectors.

Supporting Workers, Families and Carers

Budget 2027 contains a number of broader measures aimed at supporting workers, families, carers and those in receipt of social welfare supports.

Most weekly social welfare payments will increase by €10 from January 2027. The income disregard applicable to Carer’s Allowance will increase to €1,150 per week for a single person and €2,300 per week for a couple from July 2027. Fuel Allowance will increase by €5 per week, while a new €500 Cost of Disability payment has been announced for people receiving long-term disability payments.

The national minimum wage will increase by 79 cents to €14.94 per hour from 1 January 2027. Employers should review their payroll arrangements in advance to ensure that all eligible employees receive at least the revised statutory rate. The increase may also have wider implications for pay structures, particularly where employees are paid at, or marginally above, the national minimum wage.

Taken together with the changes to childcare supports, taxation and housing-related reliefs, these measures demonstrate a continued focus on easing financial pressures for households and supporting workforce participation.

Housing, Regeneration and Property Ownership

Housing and regeneration featured prominently in Budget 2027, with a number of measures aimed at increasing supply and bringing underutilised property back into productive use.

For first-time buyers, the increase in €5,000 of the Help-to-Buy (HTB) Relief to €35,000 provides additional support towards a deposit for their first home. The increase takes effect immediately. The €500,000 property price cap remains unchanged, meaning the enhanced relief will not benefit purchasers of properties above that threshold.

Existing Homeowners may benefit from the increase in the Rent-a-Room Relief tax free threshold. This relief allows homeowners to earn income from letting a room in their primary residence tax free. The annual tax-free threshold will increase from €14,000 to €16,000, and the relief will be extended to certain garden, auxiliary or modular dwellings installed after 27 July 2026. Property owners, considering providing accommodation within the grounds of their home, should also consider any applicable planning, building regulations, insurance and other property law requirements, as eligibility for tax relief does not remove the need to comply with those separate obligations.

Budget 2027 also confirmed the introduction of the Derelict Property Tax. The tax replaces the previous levy system and will apply at the same rate of 7% of the market value of a property. While they will no longer collect the levy, local authorities continue to be responsible for identifying derelict properties and maintaining a register of derelict properties in their area. It is expected that the new regime will capture more derelict properties and as the tax will be recovered by Revenue under the standard tax administration framework the Government anticipates a high rate of recovery of the Derelict Property Tax.

The Residential Zoned Land Tax (RZLT), which came into effect on 1 February 2025, remains a key housing activation measure. RZLT is an annual tax calculated at 3% of the market value of qualifying land and is intended to encourage the development of suitably zoned and serviced land for residential purposes. Budget 2027 introduces a new exemption process for certain landowners seeking to have affected lands rezoned, provided genuine economic activity is being carried out and the relevant local authority is satisfied that the exemption criteria have been met.

Using both a carrot and a stick approach, these measures are intended to support home ownership and assist with freeing up rental stock at a time when housing costs remain a significant concern.

Succession Planning and Wealth Transfer

Budget 2027 introduces several measures relevant to estate planning and intergenerational wealth transfers.

The Capital Acquisitions Tax thresholds will increase to €420,000 for Group A, €44,000 for Group B and €22,000 for Group C. These changes may provide additional flexibility for families transferring assets by way of gift or inheritance.

The standard rate of Capital Gains Tax will also be reduced from 33% to 31%. This may be of interest to business owners, investors and individuals considering the transfer, disposal or restructuring of assets. However, the reduced rate will not apply to disposals of development land.

Combined with the introduction of Personal Investment Accounts, these measures may create additional opportunities for long-term financial and succession planning. Individuals should nevertheless obtain appropriate legal, tax and financial advice before implementing any arrangements.

Looking Ahead

Budget 2027 seeks to balance economic growth with continued investment in housing, infrastructure, public services and Irish enterprise.

For businesses, the focus is on investment, innovation and access to capital. For employers and employees, the Budget provides targeted measures aimed at increasing take-home pay and easing cost of living pressures.

For property owners and families, changes have been introduced in relation to housing, land use and succession planning.

While many of these measures will require further legislative implementation and guidance, businesses and individuals should begin considering how the changes may affect their particular circumstances and seek advice where appropriate.

For further information, the Government’s Budget Guide is available here.

This article was prepared collaboratively by Emma Comyn, Partner (Property & Real Estate); Cian Duane, Partner (Commercial); Conor White, Partner (Employment); Sarah Byrne, Senior Associate (Commercial / Real Estate); Amy McNicholas, Solicitor (Employment); Kevin O’Driscoll, Solicitor (Employment/Commercial); and Kate Russell, Solicitor (Property & Real Estate).