Budget 2026 – the farming angle
Financial Management Specialist at Teagasc, Kevin Connolly analyses yesterday’s Budget 2026, summarising the main budget measures and outlining some of the other tax changes impacting the farming sector.
At a quick glance, Budget 2026 can be summarised as a budget of very little change; income tax standard rates remain unchanged, principal tax credits remain unaltered and no changes to the rate of Capital Gains Tax (CGT), Capital Acquisitions Tax (CAT), the operation of Agricultural Relief or the main Retirement Relief Limits for 2026 were announced.
From a relief perspective, yesterday’s Budget brought extensions to CGT Restructuring Relief, along with an increase in the lifetime limit for those applying to CGT Entrepreneur Relief, and extensions to two key Stamp Duty reliefs namely Young Trained Farmer Relief and Consolidation Relief.
However, some notable changes were announced as part of yesterday’s Budget package. Falling in line with the increase in the minimum wage to €14.15 per hour from January 1, 2026, there has been a realignment of the USC 2% and 3% bands. There have also been changes to Social Protection Payments for 2026, with a general €10 weekly increase applied.
Additionally, other taxation measures of note are an increase in PRSI rates by 0.1% from October 1, 2025, bringing the Class S rate to 4.2%, while the VAT flat rate farmer additional rate is to decrease from 5.1% to 4.5% from January 1, 2026.
As a result of yesterday’s Budget and the corresponding announcement that Carbon Tax will increase by €7.50 from €63.50/t to €71/t of CO2, 2c/L will be added to the price of petrol and 2.5c/L to auto diesel from midnight on October 9, 2025. This increase will be applied to all other fuels with effect from 1 May 2026. There will be annual Carbon Tax increase at the same €7.50 per tonne level every year up to the year 2030 with a final targeted per tonne tax rate of €100 by that year.
Farming scheme funding in Budget 2026
Also announced as part of yesterday’s Budget 2026 was the allocation of funding to the Department of Agriculture, Food and the Marine – totalling over €2.3 billion and key to the continuation of a number of key farming schemes into 2026.
Of note was the announcement of funding for the much-publicised TB Action Plan, allocated €157 million of funding for its implementation and a proposal for a lean review of the bovine TB programme.
Funding of €88 million was also announced for the continuation of the Targeted Agricultural Modernisation Scheme (TAMS), while €131 million has been set aside to cover targeted supports for the beef, sheep and suckler farmers and, also the National Genotyping Programme.
In terms of tillage farmer supports, €50 million has been allocated to cover the Protein Aid Scheme, Straw Incorporation Measure and a new Tillage Support Scheme.
Other areas where funding has been allocated include: Knowledge Transfer Scheme – €8.25 million, Organic Sector Funding – €58.6 million to continue to fund the 5,500 farmers in the Organic Farming Scheme, ACRES – increased allocation of €20 million to €280 million to continue to support payments to 53,800 farmers, National Forestry Programme – €93 million in funding to support planting targets.
The above is just a brief summary of the measures carried in Budget 2026. For more details and to see how the above changes affect your farm, read Kevin Connolly’s ‘Budget 2026 – Summary of the main Budget measures’ (PDF) here.
More from Teagasc Daily: Webinar offers key insights on TAMS 3 grants for livestock farmers
More from Teagasc Daily: Save tax and plan smart on drystock farms