Budget 2026 Unveiled: Urgent VAT Cuts and Major Spending Announced

UPDATE: Budget 2026 has just been unveiled this afternoon, revealing significant changes that prioritize business needs over individual taxpayers. The budget emphasizes urgent VAT cuts for the hospitality and construction sectors, effective July 1, 2026, amid reports of intense negotiations among officials.

Officials, including Paschal Donohoe and Jack Chambers, have confirmed that this year’s budget negotiations have been the most challenging in years, with ministers reportedly working late into the night to finalize details. The announcement marks a pivotal shift as the government focuses on capital spending and enterprise rather than direct cost of living relief or income tax reductions.

Key highlights include a VAT rate cut for the hospitality sector and reduced VAT for new build apartments. Additionally, the government plans to maintain the current reduced VAT for energy and the renters tax credit. Mortgage interest relief will be extended into next year, setting the stage for a gradual phase-out by 2027.

In a bid to enhance public safety, funding will be allocated for hiring up to 1,000 new Gardaí, alongside 860 special education teachers and the deployment of 1,700 special needs assistants (SNAs). The income disregard for the carers allowance will experience a significant increase to €1,000 per person per week, and students can anticipate a permanent reduction in fees by €500.

Social welfare recipients can expect a double Christmas bonus, with core rates set to rise by €10. The childcare budget is receiving a substantial boost of half a billion euros, aimed at creating more childcare places. However, last-minute discussions to further reduce fees were ongoing as of last night.

As the budget is rolled out, all eyes will be on how these measures will impact businesses and families alike in the coming months. The focus on business incentives raises questions about the immediate relief available to ordinary citizens facing rising costs.

Expect further details and reactions from impacted communities as the announcement is digested throughout the day. Stay tuned for live updates on how Budget 2026 will shape the future economic landscape.