People will be able to put €12,000 a year tax free into the Government new personal investment accounts, Minister for Finance Simon Harris announced in his Budget 2027 speech.
The accounts will feature a low tax rate of just 1 per cent. However, this tax will be levied on any amount in the account over a tax-free threshold of €50,000, not just the profit the account made over that year.
This holds out the prospect of people paying tax on their savings in years when they lost money simply because the balance of their account was above the €50,000 tax-free threshold.
Harris said the new accounts will be available from July 1st next year. About €170 billion is currently on deposit in Irish bank accounts, with the Minister previously describing that money as “sitting idle”.
Alongside the new accounts, the Minister announced a financial literacy campaign. The Competition and Consumer Protection Commission (CCPC) has set up a webpage that will allow people to read up about issues around investing and the choices available.
It also offers a quick multiple choice self-assessment quiz that allows consumers to assess their investment readiness.
[ Budget Q&A: Submit your questions to our expert panel on budget dayOpens in new window ]
Irish households hold just 2.3 per cent of their financial assets in direct investments such as listed shares and debt securities, compared with an EU average of approximately 7.5 per cent.
The new scheme has been designed to encourage people to move their savings into market investments.
“The long-mooted investment account is an important step towards making long-term investment more accessible,” said Cróna Clohisey, director of members and advocacy at Chartered Accountants Ireland. “Now that the broad design has been announced, Government should move quickly to finalise the legislation, systems and guidance so that financial service providers can establish these accounts and people can begin using them.
“It is critical that there is no delay to the introduction timeline of mid-2027,” she said.
Michael Healy, chief executive of IG Consumer, said the Government had missed the chance to get Irish people investing.
“While the decision to set the tax-free threshold at €50,000 is better than we expected, it is a small victory within a fundamentally flawed model. The €12,000 annual contribution limit is far too low if the ambition is to get people investing seriously and building meaningful long-term wealth.
“But the bigger problem is the proposed 1 per cent annual tax on investments above the threshold,” said Healy. “Taxing the value of an investment rather than the return it generates means someone could face a tax bill even when their investments have fallen in value – effectively paying tax on losses. That is the wrong principle for an account designed to encourage people to invest.”
The Government also announced a lowering of the rate of tax under the “deemed disposal” or exit tax regime that applies to investors in products currently available in the market.
Last year, as part of Budget 2026, the deemed disposal tax rate was reduced from 41 per cent to 38 per cent. In 2024, a report by the Department of Finance into the funds sector advised the deemed disposal rule should be ended for ETFs and investment funds.
Exit tax is levied on profits when an investment is cashed in. Deemed disposal see that tax levied every eight years after an investment is taken out even if the investment is not cashed in.
Chartered Accountants Ireland’s Cróna Clohisey said it was “extremely disheartening that the eight-year deemed disposal rule remains. It has no place in a modern Irish investment landscape.”
“Requiring people to pay tax on gains they have not realised undermines the benefits of long-term investment, adds unnecessary complexity for individual investors, and contradicts the wider Government drive to foster retail investment and encourage greater financial literacy.”
New accounts
Anyone over the age of 18 who is resident in the State and holds a PPS number can invest in the new personal investment scheme but they can only have one account.
Eligible investments will include listed shares, listed bonds, financial instruments traded on a regulated market and a range of investment funds suitable for retail investors, including exchange-traded funds (ETFs).
Investors will not be permitted to invest in what are deemed highly complex and risky products, including derivatives and crypto assets.
[ Catch up with all your Budget 2027 news hereOpens in new window ]
There will be no minimum holding or lock-in period and moving investment accounts between providers will be allowed, where possible, on a tax-neutral basis.
Any tax due will be calculated and paid at source by the companies providing the investment funds available under the scheme.
What is not yet clear is how much providers will charge for the products they offer.
Harris first announced his intention to introduce a new form of consumer-friendly investment account back in February.
He has returned to the theme regularly since then but, until Tuesday, had declined to confirm the amount that could be put into such accounts each month or year, the threshold above which the funds will be taxed and the rate of taxation.
Harris’s department had examined similar types of accounts operating in other countries. Ultimately, it opted largely for the Swedish model despite strong industry lobbying in favour of the rival UK individual savings account (ISA) model.