Budget 2027 VRT Changes: New VRT Rates and VRT Increase from January 2027

Budget 2027 will increase Vehicle Registration Tax (VRT) rates for many passenger vehicles from 1 January 2027.

The Government has announced a 1 percentage point increase in VRT rates for CO₂ Bands 3 to 20.

This means that many petrol, diesel and hybrid vehicles will face higher VRT when registered in Ireland from 1 January 2027.

The change is particularly important for anyone planning to import a car into Ireland, as the increase can add hundreds or, for higher-value vehicles, potentially thousands of euro to the VRT bill.

The €5,000 VRT relief for qualifying new electric vehicles is also being extended until 31 December 2028.

Important: The Budget 2027 measures require implementation through legislation. The rates below reflect the announced Budget proposals and should be checked against the final Finance Bill and Revenue guidance.

VRT Rates 2027 – New Rates Compared with Previous Rates

The VRT system for passenger vehicles is based on the vehicle’s WLTP CO₂ emissions.

Under Budget 2027, the VRT percentage rates for Bands 3 to 20 increase by 1 percentage point.

Bands 1 and 2 remain unchanged.

2026 VRT Rates vs 2027 Rates

What does the 1% VRT increase actually mean?

It is important to understand that a 1 percentage point increase in the VRT rate is not the same as VRT increasing by 1%.

VRT is calculated using Revenue’s Open Market Selling Price (OMSP).

For example, if Revenue determines that a vehicle has an OMSP of €40,000 and it moves from a 30% VRT rate to 31%:

Previous VRT:
€40,000 × 30% = €12,000

2027 VRT:
€40,000 × 31% = €12,400

Additional VRT: €400

For a vehicle with an OMSP of €80,000, the same one percentage point increase represents an additional €800.

For a €100,000 OMSP, it represents €1,000.

Which cars are affected by the VRT increase in 2027?

The increase applies to vehicles falling into VRT CO₂ Bands 3 to 20.

This means that many:

• Petrol cars
• Diesel cars
• Hybrid cars
• SUVs
• Performance cars
• Luxury cars
• Higher-emission PHEVs

will be subject to the higher VRT rates.

Vehicles in Bands 1 and 2 remain at 7% and 9% respectively under the announced changes.

What about hybrid cars?

Hybrid vehicles need to be assessed individually.

Some low-emission hybrids can fall into the lower VRT bands, while higher-emission hybrids can fall into Bands 3–20 and therefore face the additional 1 percentage point VRT rate.

This is particularly important when comparing different versions of the same model.

What about plug-in hybrid cars?

Plug-in hybrids can also be affected depending on their official CO₂ emissions.

A PHEV with sufficiently low WLTP emissions may remain in Bands 1 or 2 and therefore avoid the Budget 2027 increase.

However, a higher-emission PHEV falling into Band 3 or above will be subject to the new rate.

Always check the official CO₂ figure for the exact vehicle rather than relying on the model name alone.

What about electric vehicles?

The Budget contains positive news for electric vehicle buyers.

The Government has announced that the €5,000 VRT relief for qualifying new electric vehicles will be extended until 31 December 2028.

Fully electric vehicles are also not affected by the 1 percentage point increase applying to VRT Bands 3–20.

This means the Government continues to provide a significant VRT incentive for qualifying new EVs.

When does the VRT increase start?

The announced VRT increases are due to apply from:

1 January 2027

This is particularly important for anyone currently importing a vehicle.

If you are planning to register a vehicle around the end of 2026 or beginning of 2027, you should establish which VRT rate will apply based on the vehicle’s registration circumstances.

Do not assume that buying a vehicle or shipping it to Ireland before the end of 2026 automatically means that the old VRT rate will apply.

How much will VRT increase in 2027?

There is no single amount because the increase depends on the vehicle’s OMSP.

These are illustrations only. The actual VRT calculation depends on Revenue’s OMSP and the vehicle’s applicable VRT rate.

What does Budget 2027 mean for used car imports?

The changes are particularly relevant to people importing used vehicles into Ireland.

If you are importing from the UK, Northern Ireland, Japan or another country, the VRT calculation should be completed before committing to the purchase.

For a vehicle imported from Great Britain, the total cost may include:

Purchase price + transport + customs duty + import VAT + VRT + NOx

The VRT increase is therefore only one part of the total import cost.

Importing a car from the UK after Brexit

Since 1 January 2021, vehicles imported from Great Britain are generally treated as imports from outside the EU for customs purposes.

Depending on the vehicle and its circumstances, you may have to deal with:

• Customs duty
• Import VAT
• VRT
• NOx charge
• Customs declarations
• Vehicle registration

The rules around customs duty and VAT are separate from VRT.

A vehicle can therefore have a low VRT liability but still have substantial customs or VAT costs.

Should you import a car before 2027?

For some vehicles, registering before 1 January 2027 could result in a lower VRT bill.

However, this needs to be calculated on a vehicle-by-vehicle basis.

The potential saving depends on:

1. The vehicle’s CO₂ emissions.
2. Its VRT band.
3. Revenue’s OMSP.
4. The applicable VRT rate.
5. The vehicle’s NOx emissions.
6. Whether any VRT relief or exemption applies.
7. The circumstances and timing of the vehicle’s registration.

VRT 2027: Frequently Asked Questions

What are the new VRT rates for 2027?

From 1 January 2027, VRT rates for CO₂ Bands 3–20 are increasing by 1 percentage point. Bands 1 and 2 remain unchanged.

What is the highest VRT rate in 2027?

Under the announced changes, Band 20 increases from 41% to 42%.

What is the lowest VRT rate in 2027?

Band 1 remains at 7%, while Band 2 remains at 9%.

Is VRT increasing on every car?

No. The 1 percentage point increase applies to Bands 3–20. Bands 1 and 2 are unchanged.

Are electric cars affected?

Qualifying new electric vehicles continue to benefit from the €5,000 VRT relief, which has been extended to 31 December 2028.

Are hybrid cars affected by VRT 2027?

Many hybrids will be affected, depending on their official WLTP CO₂ emissions.

Are PHEVs affected?

Some will be and some will not. The exact CO₂ emissions determine the VRT band.

Will imported used cars be affected?

Yes, potentially. A used imported vehicle falling into Bands 3–20 will be subject to the higher 2027 rate.

Calculate your VRT before buying

Budget 2027 makes it even more important to calculate the complete cost of importing a vehicle before buying it.

A vehicle that appears to be a bargain overseas can become considerably more expensive once customs duty, VAT, VRT and NOx are included.

At VRT.ie, our import cost calculations can help you estimate the likely Irish costs before you commit to purchasing a vehicle.

Simply provide the UK registration and purchase price to generate an estimate of the applicable import costs.

Check your VRT before you buy

Don’t buy the car first and calculate the VRT afterwards.

Check the VRT, calculate the total landed cost and then decide whether the vehicle is still a good deal.

Calculate Your VRT and Import Costs