Dáil Éireann Debate, Wednesday - 17 December 2025
173. Deputy Sorca Clarke asked the Tánaiste and Minister for Finance the estimated cost to the Exchequer of tax measures announced in Budget 2026 to support families with energy and housing costs, disaggregated for the midlands region; and if he will make a statement on the matter. [72627/25]
View answerBudget 2026 included a number of tax measures relevant to the Deputy's question. The measures include the following:
Microgeneration of Electricity
Budget 2026 extends the exemption from income tax, USC and PRSI for householders for certain profits of up to €400 per annum from the microgeneration of electricity, for a further three years, to 31 December 2028. The estimated full year cost of the proposed extension is €10 million.
Extension of the VAT Reduction on Gas and Electricity
Ireland currently applies the second reduced rate of 9 per cent to the supply of gas and electricity. This measure was due to expire on 31 October 2025 and revert to 13.5 per cent on 1 November 2025. Budget 2026 extended this measure to 31 December 2030 by way of a Financial Resolution on 7 October 2025. The estimated full year cost of extending the 9 per cent VAT rate on the supply of gas and electricity is €254 million.
Extension of Vehicle Registration Tax (VRT) Relief for Electric Vehicles
Budget 2026 extends the Vehicle Registration Tax relief for electric vehicles by one year to 31 December 2026. The estimated cost of this tax measure, in respect of 2026, is €40 million.
Extension of the Rent Tax Credit
Budget 2026 extends the Rent Tax Credit by a further three years to the end of 2028. The estimated full year cost of this measure is €350 million.
Extension and Expansion of the Living City Initiative
The Living City Initiative is a targeted measure which is aimed at specific areas in need of regeneration, and includes measures to support owner-occupiers. The recent Budget address announced a number of enhancements to the scheme. The estimated full year cost of these measures is €25 million.
Mortgage Interest Tax Relief
Budget 2026 extends the Mortgage Interest Tax Relief, on a tapered basis, for two further years, to 31 December 2026. The current level of relief will be maintained for the increase in interest paid in the tax year 2025 over 2022, with a maximum tax credit of €1,250 per property available. The estimated cost in respect of 2026 is €25 million and, in respect of 2027, €13 million.
As the above tax measures are demand led schemes, it is not possible to set out the estimated cost on a regional basis.
Finally, the Budget 2026 Tax Policy Changes documentation sets out further details in respect of these measures and the other tax measures announced in the Budget.
See: assets.gov.ie/static/documents/15569ee3/Budget_2026_Tax_Policy_Changes_Book.pdf
