Dáil Éireann Debate, Wednesday - 18 February 2026
41. Deputy Barry Ward asked the Tánaiste and Minister for Finance his views on whether the existing rate of capital gains tax acts as a disincentive for investment for Irish people; and if he will make a statement on the matter. [13135/26]
Amharc ar fhreagra42. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding any review of the existing rate of capital gains tax as part of the Government savings and investment strategy (details supplied); and if he will make a statement on the matter. [13136/26]
Amharc ar fhreagraI propose to take Questions Nos. 41 and 42 together.
I am aware of the need to encourage and support retail investment.
Capital Gains Tax (CGT) is chargeable on a gain arising on the disposal of an asset, including a residential property or shares in a company, at the rate of 33%. The first €1,270 of chargeable gains of an individual in any year are exempt from CGT. The existence of a 33% rate of CGT can help maintain a balance between the rate of taxation of capital assets and the higher rate of income tax. There are a number of targeted reliefs including principal private residence relief, retirement relief and revised entrepreneur relief. Exemptions often require a higher rate in order to generate an appropriate yield.
The Programme for Government commits to maintaining a broad tax base to guard against the need for counter-cyclical fiscal policy in the event of a downturn and to prepare for future budgetary challenges relating to population aging. Capital Gains Tax (CGT) is part of a system to ensure taxation is not focused solely on income tax and that those who benefit from gains in the value of their assets are included within the tax net on an equitable basis. As with all taxes, CGT is subject to ongoing review, which involves the consideration and assessment of the rate of CGT and the relevant reliefs and exemptions from CGT as part of the annual Budget and Finance Bill process, and this is considered in the wider tax policy context.
In terms of investment, I would note that CGT applies to a gain arising from the disposal of a direct investment such as a share, while different taxation regimes apply to investments made through investment funds or life assurance products. Budget 2026 included a reduction in the rate of tax that applies to such investments from 41% to 38%. In addition, Budget 2026 included a commitment to publish a roadmap for the taxation of retail investment. Work is continuing on this roadmap, which will set out an approach to simplify and adapt the tax framework to further support retail investment while retaining necessary and important anti-avoidance protections in a proportionate manner. The roadmap will take into account the European Commission’s recommendation on Savings and Investment Accounts, and is expected to be published in the coming months. I hope further progress can be made to address some of the existing obstacles to greater retail investment over future budgets.
