Budget 2026 Takes Effect: What Changes Today Mean for Households
The Irish government’s Budget 2026 measures, announced in the Dáil, moved into effect at midnight, bringing a mix of relief and new costs for households, businesses, and students. As debates resume in the Dáil, the government argues the package balances immediate supports with longer-term fiscal sustainability.
Fuel Costs and Tax Policy: A New Price Landscape
From midnight, petrol and diesel prices were nudged higher by around two-and-a-half cents per litre as part of the Budget measures. The rise is part of broader fiscal changes designed to fund key priorities, even as other sectors receive targeted relief. The government maintains that the modest fuel increase will be offset for some consumers by reductions in other sectors, and by measures such as the VAT adjustment in hospitality and food services.
VAT Reduction for Completed Apartments and Hospitality Services
In a notable move, the VAT rate on the sale of completed apartments has been reduced from 13.5% to 9%. This is expected to stimulate the housing market, though the impact on prices will depend on developers’ pricing decisions and market competition. Separately, VAT for food and catering services—and for hairdressing—will be reduced from 13.5% to 9% starting 1 July 2026. The government estimates this will cost €232 million next year and €681 million in a full year.
Taoiseach Micheál Martin defended these measures, arguing that the hospitality VAT cut will act as a meaningful support for restaurants and cafes, particularly in rural areas where business is often seasonal. He stressed that while one-off electricity credits helped in the short term, sustainable policies were necessary to protect jobs in uncertain global conditions.
Education and Student Supports: SUSI Grants and Access Initiatives
A key portion of Budget 2026 centers on students and higher education access. The income threshold to qualify for the SUSI grant has been increased from €115,000 to €120,000, expanding eligibility for more households. Additionally, payments to students who live 30km or more from their college will rise by between €200 and €430, with the Department of Further and Higher Education predicting a benefit to about 30,000 students. An accompanying pro-rata increase applies this academic year.
Other supports include an elevated SUSI postgraduate fee contribution grant, rising from €4,000 to €4,500. These steps come alongside more than 1,100 additional healthcare course places, underscoring a broader push to address workforce needs in health and education sectors.
Supporting Students, Mental Health, and Disability Access
Budget 2026 allocates a total of €1 million for student mental health and healthy campus initiatives, and €3 million to support students with disabilities, including €1 million earmarked for higher education and €2 million for further education and training colleges. These provisions aim to improve student wellbeing and accessibility as part of a broader strategy to future-proof the country’s higher education landscape.
Political Debates, Jobs, and the Economic Outlook
As Leaders’ Questions return to the Dáil, opposition parties will press the Government to justify Budget 2026 measures and explain long-term sustainability. The Finance ministers, including Minister for Finance Paschal Donohoe and Minister for Enterprise Jack Chambers, are slated to field questions on RTÉ’s Today with Claire Byrne. The government emphasizes that a balanced approach—supporting households, enabling business growth, and protecting jobs—remains essential amid global economic uncertainty, with wages anticipated to rise by 5% this year.
Looking Ahead: What This Means for Consumers and Businesses
For consumers, the combination of a VAT cut on certain services and a measured increase in fuel prices may affect household budgets in nuanced ways. While petrol and diesel will cost slightly more, a 9% VAT rate on food, catering, and certain personal services could lower overall spending for many families, especially where dining out is common. For property developers and homebuyers, the apartment VAT reduction could influence price dynamics and housing supply in the near term.
Next Steps in Budget 2026 Coverage
The lingering question remains how these measures will perform over the coming months. Debate in the Dáil will continue, with government and opposition weighing the effectiveness of one-off supports versus structural reforms. Follow-up analyses will examine housing market responses, hospitality industry recovery, and the evolving landscape of student grants and higher education funding.
