Cormac Devlin (Dún Laoghaire, Fianna Fail)

With all the shouting and roaring, I thought there was an election happening this week. This debate involves examining the Finance Bill and many of those concerns have already been raised but are being rehashed here today.

I welcome the opportunity to examine the Finance Bill, which gives effect to the budget’s targeted tax measures and supports for businesses, jobs and housing while modernising many parts of the tax code. It is important to note that this is the first of five budgets expected in this Dáil by this Government. In many respects, it sets a steady path, protects services, invests for the future and keeps public finances on a sustainable footing. In that context, the totals matter. The budget package is €9.4 billion, comprising approximately €8.1 billion in additional spending and €1.3 billion in tax measures within a gross voted expenditure of €117.8 billion in 2026. A total of €97.7 billion has been allocated for current spending and €19.1 billion for capital investment. Three pillars dominate that spend - social protection at €28.9 billion, health at about €27.4 billion and €11.2 billion for housing to drive supply and regeneration.

This is a record budget in terms of spending but at the same time, we must be cautious. International analysts and groups like the Irish Fiscal Advisory Council, IFAC, are warning about potential market instability ahead. I agree that we must stay prudent and cautious, maintain buffers, deliver value for money and protect our fiscal credibility while we invest, but the public must also see real improvements in services and infrastructure and investment that is badly needed and appropriate.

Turning to the measures, the Bill raises the USC 2% band to €28,700 so that a full-time worker on the new minimum wage stays out of the top USC rates. It also extends the reduced USC for full medical card holders with income below €60,000 to the end of 2027. These are sensible, broad-based steps and both are welcome. From 1 July 2026, the VAT rate for hospitality and hairdressing will fall to 9%. I have long argued for a reduced VAT rate on labour-intensive sectors that generate employment in every town and village in Ireland so I welcome the cut.

For ordinary savers, the Bill cuts exit tax from 41% to 38% on Irish funds and equivalent offshore funds, including many exchange-traded funds, ETFs, and aligns life policy exit tax at 38%. That is a clear win for small investors. I ask the Minister to update the House on his thinking regarding ETFs and the eight-year deemed disposal rule. A simplification roadmap is welcome but many constituents need certainty on whether deemed disposal can be reformed in future budgets. From 1 January 2026, there will be a stamp duty exemption for buying shares in Irish-registered listed companies with a market cap below €1 billion. The old Euronext growth blanket exemption is repealed and replaced by this targeted rule. This should help liquidity for smaller Irish listings. All of this is welcome.

Tax measures in the Bill support apartment viability and urban renewal with 9% VAT on the sale of apartments to 31 December 2030. The 125% construction cost deduction, capped at €50,000 per apartment, for projects commencing 8 October 2025 to 31 December 2030 and the extension and enhancement of the residential stamp duty refund to 2030 with better phasing rules are welcome, as are the broadened living city initiative to 2030 with higher limits and new conversion reliefs, the cost-rental income corporation tax exemption and procedural flex for the residential zoned land tax, RZLT. These steps will help to close viability gaps and accelerate delivery.

Mortgage interest tax relief is extended on a tapered basis for 2025 to 2026 with maximum credits of €1,250 and then €625 payable on the usual delayed schedule. That gives some relief to those hit hardest by rate rises. The Bill extends electric vehicle, EV, VRT relief to the end of 2026 and adjusts benefit-in-kind with a new A1 zero-emission band of between 6% and 15% and a tapered relief out to 2028. It extends the €400 microgeneration income tax disregard to 2028 and keeps 9% VAT on energy to the end of 2030. These measures support the transition while recognising real household pressures.

Automatic enrolment starts on 1 January 2026. The Bill tidies tax treatment at death, extends exemptions across structures and confirms that employer automatic enrolment contributions are exempt from USC. This is a major reform that will boost retirement security for hundreds of thousands over time.

Budget 2026 continues record investment in services and spending while also trying to balance possible challenges on the horizon. In future budgets, however, I feel that tax relief for workers must be considered. This Bill moves USC sensibly but full indexation of income tax bands should be a priority across the remaining four budgets. Without it, wage growth drags families into higher taxation by stealth.

My second point concerns inheritance tax. In Dún Laoghaire–Rathdown, where family homes often exceed group A thresholds, ordinary families face capital acquisitions tax bills that do not reflect today’s property market. I support the focus on services and capital now but the next budgets should raise thresholds or otherwise ease the burden so that intergenerational transfers are fair and predictable.

Will the Minister outline the timeline and options for the promised retail investment taxation roadmap, specifically whether reform of the deemed disposal rule is on the table? Even a phased approach or an opt-in deferral mechanism at disposal would simplify life for smaller savers and bring treatment closer to direct share capital gains tax.

This Finance Bill backs jobs, investment and housing. It simplifies parts of the tax code, supports small businesses and helps households. I thank the Ministers, Deputies Donohoe and Chambers, for their engagement in advance of the budget. I look forward to engaging with them on the next four budgets where we should prioritise indexation, tackle inheritance tax and resolve ETF deemed disposal so that taxpayers are treated fairly, savers are encouraged and our capital markets deepen and strengthen.

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