Irish VRT Increases Set to Raise Prices on Popular Cars

Irish Vehicle Registration Tax Changes

The decision to increase most Vehicle Registration Tax (VRT) rates by 1 per cent starting January 1st next year will affect prices for nine of the 10 bestselling models in the Irish new car market. The tax adjustments apply to vehicles with carbon dioxide emissions exceeding 80 grams per kilometer, impacting tax bands three through 20. While the policy change exposes regular hybrid vehicles to higher costs, most plug-in hybrid electric vehicles and all fully electric vehicles avoid the increase.

Tax Schedule Raises Prices for Bestselling Car Models

The updated tax schedule alters pricing for the Toyota Yaris Cross, which currently holds the position of Ireland’s bestselling new car, alongside the standard Yaris hybrid model. Hyundai’s Tucson, the second most popular model nationwide, also faces a tax rise, though its plug-in hybrid variant with emissions up to 73 grams per kilometer bypasses the adjustment. Additional models facing higher costs for standard and hybrid configurations include the Skoda Octavia, Kia Sportage, Skoda Kodiaq, and Toyota Corolla. Official sales figures show that out of 128,268 new cars sold through the end of September, 58 per cent fall into the VRT bands targeted for the 1 per cent increase. The Government estimates the measure will generate €37 million in additional tax revenue during 2027.

Electric Vehicle Relief Extensions

Minister for Finance Simon Harris extended existing VRT relief measures for electric vehicles through the end of 2028. This relief provides up to €5,000 off the calculated VRT due on purchases of qualifying electric cars. Industry projections indicate that electric vehicles and plug-in hybrid models will account for nearly 50 per cent of total new car sales next year. However, Brian Cooke of the Society of the Irish Motor Industry criticized the broader tax increases as an unnecessary burden. The majority of people in the new year will buy a new car in the affected bands, and you are adding an unnecessary expense to people already facing increasing fuel costs and rising costs of living, Cooke said, while welcoming the continued relief for electric vehicles.