Budget 2027 tax cuts to benefit middle income earners by up to €1,500

The Government will unveil another giveaway budget on Tuesday, which will include reductions in tax for middle income earners worth up to €1,500 for a couple with a combined income of €100,000.In addition, it is expected there will be small reductions to the existing 33 per cent rate of capital gains tax when Minister for Finance Simon Harris unveils the package. The tax-free threshold for inheritance tax from parents to children is expected to increase by €20,000 to €420,000, though some of these details were still being hammered out late on Monday night.The restoration of excise on petrol and diesel, due to begin on November 1st, is expected to be postponed until March 1st, while significant reductions in carbon tax on home heating oil will also be announced.READ MOREThe higher gains than previously speculated from income tax changes will result in a bigger increase in the cut-off point at which people become liable for the higher 40 per cent rate, as well a significant hike in tax credits.The final budget negotiating sessions at Government Buildings on Monday came after protracted and often difficult negotiations over the weekend at which Minister for Public Expenditure Jack Chambers came under pressure to concede to spending requests from several departments.Chambers has insisted on sticking to a ceiling of a 6 per cent spending increase across Government as a whole, which has meant many Ministers have seen increases for their departments set at considerably lower than this because of higher increases in some big spending departments. However, supplementary estimates – ie, budget top-ups – will still be necessary this year.Harris and Chambers are expected to highlight the introduction of an annual cost-of-disability payment of €500, paid as a lump sum first and a monthly payment after next year, as well as cuts to the cost of childcare.[ The budget I want: A home owner, house hunter, parent, pensioner and business ownerOpens in new window ]A €10 increase in core welfare payments was agreed over the weekend, while the income disregard for carer’s allowance will rise by €150 for a single person and €300 for a couple. Fuel allowance will rise by a weekly rate of €5 with a higher income threshold for single people over 66 of €641, while the child support payment will rise by €6. The living alone allowance will rise by €3 per week.After tense budget talks, a spokeswoman for Minister for Culture Patrick O’Donovan said money to “progress” a culture card for young people had been secured. “All going well, we anticipate being able to roll it out by the end of the year,” she said. However, the introduction of the card, as repeatedly touted in recent weeks, seems some way off. Families with more than one child attending third level will see fees come down through expanded grant access, while college fees will also fall by €150 a year.A new fee cap of €550 per month for childcare will be introduced, with higher subsidies planned for under-sevens from next September.An increase in the renters’ tax credit to €1,150 for a single person and €2,300 for a couple will also form part of Tuesday’s package. The amount available under Help to Buy will rise by €5,000 to €35,000.There will be funding for up to 140 new public transport services, but fares will still rise as planned in 2027. The road transport support scheme is to be reopened for two months, with payments made before Christmas. A fund of at least €10 million to support rural pubs was agreed.There will be money to hire 400 new Defence Forces personnel and 100 civilian staff, with a 10.5 per cent increase on defence spending, and an increase in international aid. There will be funding for 1,000 new gardaí, additional prison officers and more for the International Protection Office – including more staff and funding for deportation flights. Budget 2027 – the main pointsIncome tax package worth up to €1,500 for middle income familiesFirst-time buyers’ support to increase€150 cut to college feesChildcare fees capped at €550 per monthNew cost of disability payment set at €500