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As Ireland navigates global uncertainties and domestic challenges, Budget 2025 is pivotal for individuals and businesses. With measures designed to ease cost-of-living pressures, enhance housing affordability, and support environmental sustainability, the Irish Government aims to sustain the nation’s economic growth while addressing immediate challenges as a general election draws near. Key highlights include adjustments in income tax bands, changes to the Universal Social Charge, and cost of living supports. For businesses, initiatives include measures to reduce complexity and boost Ireland’s attractiveness while supporting small and medium enterprises. Budget 2025 also introduces incentives for retrofitting and decarbonisation, reflecting the country’s climate action commitments. Explore our analysis to understand how these changes could impact you and your business.
PwC Tax Policy Series: Budget 2025
Key measures at a glance
Budget 2025 was a good news budget that put money into people’s pockets in an election year. What were the key measures?
€23.7bn
budget surplus expected this year.
6.9%
spending increase when compared with Budget 2024.
€105.7bn
total tax revenue for 2024.
€10.5bn
2025 total budgetary expenditure.
Infrastructure
Various initiatives and reliefs with the aim to alleviate the housing crisis.
Personal Tax
€2,000
increase in the level at which the higher rate of income tax kicks in.
€125–300
boost in various income tax credits.
3%
USC rate, down from 4%.
Inheritance tax thresholds have increased across the three categories.
€500
increase to the Small Benefit Exemption, permitting five non-cash benefits by an employer per year.
Cost of Living
12-month
extension to the mortgage interest relief scheme.
€12
increase in social welfare payments across the board.
9%
VAT rate for electricity and gas extended to 30 April 2025.
Business Tax
Confirmation of participation exemption for foreign dividends to come into effect from 1 January 2025.
20%
Unscripted Production tax credit up to €15m of qualifying expenditure.
Enhancements to the Employment Investment Incentive (EII), Start-Up Relief for Entrepreneurs (SURE) and Start-Up Capital Incentive schemes.
Climate
€7.50
increase in the carbon tax per tonne of carbon dioxide emitted for petrol and diesel from 9 October.
Installation of heat pumps subject to 9% reduced rate of VAT.
Further measures to increase the number of EVs, including changes to VRT.
Other
€6bn
transferred to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.
80c
increase in the hourly minimum wage to €13.50 per hour.
15%
stamp duty on the purchase of ten or more houses with immediate effect.
Learn how Budget 2025 could affect you and your business.
Explore our Budget insights
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