Eimear Killian’s phone is lighting up in the aftermath of the Budget 2026 announcement, with a much lighter and brighter tone of message than the previous two budgets.
This is because the VAT rate on hospitality will be reduced from 13.5 per cent to 9 per cent from July 2026.
For Killian, and her business partner Heather Connolly, who run a cafe and bakery in Spiddal, in south Connemara, a reinstatement of the rate brings relief, even if it won’t come into effect until next summer.
What is of concern, however, is the anticipated pressure they will face from January 1st, 2026, when the national minimum wage increases by 65 cents to €14.15 per hour.
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“Probably about 40 per cent of our staff are paid from minimum wage, so they will all see wage increases. But this will have a ripple effect on all the other staff, because they will come looking for 5 per cent increase too.
“That’s not feasible for us and I am expecting these questions will come my way as a result of the budget changes.
“We’re also trying to find our way through auto-enrolment, which is mandatory from January 1st also, and how this will impact us and the costs involved too. We have a lot to wrap our heads around now.”
With an understanding of just how costly it can be to make ends meet these days, does she think the VAT reduction in hospitality will be passed on to customers?
“I really don’t know but it is something we will definitely look at. We have to wait and see what the cost of food is at that time, because let’s say if coffee – which has gone up by 35 per cent – increases again, you’re not going to be able to absorb that increase if a cup of coffee is decreased in price.”
Outside of the business, Killian, who is married with no children, doesn’t feel the budget has put anything back in her own pocket.
“Personally, I get nothing out of it – zero. Everything continues to go up, like food and petrol and diesel. It is going to be a tough year ahead for anyone earning just above the lower thresholds of income and middle income, who can claim nothing from the State.” – Siobhán Maguire
Landlord: ‘They just totally ignored landlords’
“From a landlord’s point of view, it is disappointing,” Brendan Allen, a former landlord and committee member of the Irish Property Owners’ Association (IPOA), says of Budget 2026.
The main relief for landlords in the budget is the extension for another three years of the income tax deduction for small landlords who retrofit their properties.
Under this scheme, landlords can claim up to €10,000 tax relief per property retrofitted. The number of properties landlords can claim the relief on was also increased from two to three.
However, Allen says landlords are disappointed more of their concerns were not addressed.
“They just totally ignored landlords ... it’s disappointing when you think landlords are providing housing, they are dealing with increased regulations, but they need to be able to afford to do it.”
Although he welcomes the retrofitting relief, “the expenditure could be significant” for landlords who wish to access the scheme.
“It requires serious expenditure for the landlord, and the obligation to provide accommodation to the tenant while the work is being undertaken.”
One of the measures IPOA sought in its pre-budget submission was for rental income to be treated in the same way as income from a trading business when it comes to taxation.
“Landlords are denied reliefs that are available to a trading business. Why would a landlord want to stay in the rental business where you are discriminated against in tax legislation?”
Another measure IPOA called for was the expansion of “rollover relief”, which allows individuals or businesses to defer paying capital gains tax when they sell an asset and reinvest in a new asset.
This was also not made available, and has left landlords feeling ignored, Allen says.
“It’s great the retrofitting is still there, but it’s minor enough to be quite honest with you, and it would not encourage anybody to remain as a landlord.” – Niamh Towey
A small producer: ‘No silver bullet’ for enterprise in budget
“There is no silver bullet, there never is,” says Pádraic Ó Griallais (38), the co-owner of Micil Distillery, while discussing a potential “slight” benefit to distilleries from the reduced VAT rate encouraging people to eat out more.
“It is a really positive measure,” he says, describing it as “a step in the right direction” which will greatly benefit the hospitality sector.
“A bit more aggressive thinking wouldn’t go astray,” he says in reaction to the lack of specific measures to aid the distilling sector.
“Maybe there needs to be more bravery and leadership in some of the budget decisions and policies,” he says.
He suggests that the Government needs to become “more pro-entrepreneur”.
“Honestly, those are the people who take the risks and I think they should be rewarded for doing so.”
He went into the budget hoping to see increased funding for semi-State agencies such as Bord Bia, Enterprise Ireland and local enterprise offices, which he said “deserve an awful lot of praise and credit” for helping small businesses access export markets.
[ Budget 2026: Some families will lose outOpens in new window ]
He hailed the increased funding allocation to these bodies through the Department of Enterprise as a “really positive move” given the “hard and soft supports they provide to small and medium enterprises”.
“This is a really logical move which will help [SMEs] to develop new and existing markets. The cost of accessing new markets is really high,” he said.
“The likes of the local enterprise offices, which have been incredibly supportive, and Enterprise Ireland getting more funding to help support businesses is a really positive step.”
He had been hoping for a reduction in excise duty for distilleries in Budget 2026 but was not surprised it was omitted.
“I think it’s something that will have to be discussed and ironed out, maybe in advance of the of the next budget.”
He believes the duty, which is the third highest in the EU, is hurting small producers. “There is more to be done to support fledgling businesses,” he said, but noted Government had made “positive moves in the budget”. – Hugh Dooley
Teacher: ‘There doesn’t seem to be any path to move us forward’
Ann-Marie Murphy, a secondary schoolteacher based in Maynooth, Co Kildare, felt “disappointed and disheartened” after hearing this year’s budget announcement.
“I can’t see this having any impact on us whatsoever,” she said.
While welcoming the two-year extension of the mortgage interest tax relief, which she said has helped her family, it is “disappointing that it’s being reduced and then phased out”.
Describing an absence of any changes to her taxation, and a lack of measures to ease high utility and food bills, she says she feels “despondent”, adding that her family will be worse off as they will remain “stagnant” while costs continue to increase.
“I feel like there’s no support whatsoever. We’re in a lucky position, we’re both working, and I really feel for single parents. If I was a single mother trying to raise my three kids and face the winter with these rising food costs and rising utility bills, I don’t know how much further I could tighten my belt,” she said.
As a teacher, she welcomed the additional 1,700 special needs assistants, which “sounds great as a bulk number”, but questioned what this will mean on the ground.
Of the 1,042 teacher posts outlined, 860 are for special needs teachers, another welcome announcement, though she says this means the number of additional subject teachers “won’t even replace who’s leaving to go to Dubai”.
She described a lack of targeted measures to ease the teacher and recruitment crisis as “shortsighted”.
“It’s just kicking the can down the road, and we’re the ones dealing with it on the ground every day,” she said.
“A lot of public service workers are in the same boat as we are, in this stagnant state, and there doesn’t seem to be any path to move us forward,” she said. – Jack White
Farmer: Government has ‘no regard for the crisis we are dealing with’
Isaac Wheelock’s disappointment is palpable. The 35-year-old tillage farmer in Enniscorthy, Co Wexford, had hoped the sector would see greater support in Budget 2026 because it is known to be in crisis.
Although the Government announced funding of at least €50 million through the Protein Aid Scheme, the Straw Incorporation Measure and a Tillage Support Scheme, Wheelock believes this will not be enough to keep the industry going when food production, land and fertiliser costs continue to soar.
He is also concerned about how the money will be allocated.
“To be honest, I think it’s a bit of an insult to the tillage industry.”
“The Government wants to grow the tillage industry and wants to get it up to 400,000 hectares, but what they’ve offered is €100 a hectare, which is €40 an acre and that’s not going to do anything for the sector.”
Wheelock says he now has to look at his costs and figure out if he is able to make any further cuts or reductions to keep his tillage farming going.
“This is a huge problem, because if tillage farmers like me are cutting costs in regards to fertilisers or chemicals or anything like that, it’s a yield penalty that we suffer so even more money is lost.
“I’m disappointed because it feels the Government has undermined the tillage industry once again, and has no regard for the crisis we are dealing with.”
“One positive thing is that the Government secured €10 million for the straw chopping scheme [Straw Incorporation Measure], because that is fantastic and it needs to stay.
“It is good to see some tax relief to entice more younger people into farming but in the bigger picture support of €40 an acre will not be enough to convince more people into farming.” – Siobhán Maguire
[ The Irish Times view on Budget 2026: driven by the electoral cycleOpens in new window ]
