Budget 2026 measures take effect as midnight arrives
As the clock struck midnight, several Budget 2026 measures announced in the Dáil yesterday began to impact households and businesses across Ireland. The government said the new package aims to support hospitality sectors, protect jobs, and invest in students and higher education, even as it navigates global economic uncertainty.
VAT changes: hospitality and food services receive a 9% rate
From now, the VAT rate on the sale of completed apartments has been reduced to 9% from 13.5%. In a separate move, the VAT on food, catering services, and hairdressing will fall from 13.5% to 9% starting July 1, 2026. The government estimates this will cost about €232 million next year and €681 million in a full year. Taoiseach Micheál Martin defended the plan, arguing the reduction will provide a meaningful boost to the hospitality sector, particularly in rural areas where many establishments rely on seasonal demand.
Finance ministers noted that while the reductions will support restaurants and cafes, the country must balance relief with long-term fiscal sustainability. Opposition leaders will have an opportunity today to press the Government on these measures during Leaders’ Questions as debate on Budget 2026 resumes in the Dáil.
Fuel prices: a modest rise as measures take effect
Alongside VAT moves, fuel costs edged up at the pump. From midnight, around two-and-a-half cents was added to the price of a litre of petrol and diesel. The change has been framed as part of broader budgetary adjustments and will be watched closely by households and businesses with heavy commuting needs or vehicle fleets.
Other fiscal updates: education, SUSI, and student supports
Budget 2026 also brings notable changes for students and higher education. The SUSI grant income threshold to qualify for support has been increased from €115,000 to €120,000, expanding access for more students. Payments to students who live 30km or more from their college will rise by between €200 and €430, with a pro-rata increase applying this academic year. The SUSI postgraduate fee contribution grant rises from €4,000 to €4,500, reflecting a commitment to ease study costs for postgraduate students.
Officials say these steps could benefit around 30,000 students, and the Department of Further and Higher Education emphasizes that the additional funding aligns with broader mental health and disability supports at third-level institutions. A dedicated €1 million package targets student mental health and healthy campus initiatives, while €3 million supports students with disabilities across higher and further education sectors.
Listening to concerns: Leaders’ Questions and the sustainability debate
As debate continues, opposition parties will have a platform to question ministers on the Budget measures during Leaders’ Questions. Taoiseach Micheál Martin defended Budget 2026 on RTÉ’s Nine O’Clock News, arguing that it would be unsustainable to sustain repeated one-off supports—such as electricity credits—indefinitely. He stressed that the VAT reduction for the hospitality sector and other measures are designed to protect jobs and stimulate consumer activity in a challenging economic environment.
What this means for households and businesses
For households, the ripples from these measures may include lower costs on dining out and catering services, offset by the marginal increase in petrol and diesel prices. For landlords, developers, and buyers in the housing market, the 9% VAT reduction on completed apartments could influence project costs and prices. For students, the adjusted SUSI grants and enhanced supports aim to ease living and study expenses as part of a broader push to retain talent within the Irish education system.
Upcoming discussions and implementation
With Q&A sessions planned and ongoing scrutiny from the opposition, the final shape of Budget 2026 will continue to evolve as details are implemented and monitored. The government will need to demonstrate how its mix of tax reliefs, targeted funding, and consumer costs balance short-term relief with long-term fiscal health.
