Vehicle weight tax proposed for Budget 2026

A vehicle weight-based tax for cars and SUVs, similar to that already active in France, has been proposed ahead of Budget 2026, according to tax strategy papers published this week.

The Tax Strategy Group (TSG), chaired by the Department of Finance, said in its annual reports that a weight-based tax measure in Ireland “could operate as a surcharge in addition to the existing emissions-based VRT calculation, such that the total VRT liability would be calculated as CO2 component + NOx surcharge + weight surcharge”.

The TSG said that the weight tax would initially only apply to combustion and hybrid vehicles, with options for a phased extension to fully-electric vehicles over time “as the fleet transitions”. It said EVs would “be afforded a more generous weight threshold to account for their battery weight”.

Wheelchair-accessible vehicles and those requiring heavier vehicles due to mobility restrictions would be exempt.

In its tax strategy papers, the TSG also said the growth in EV sales “will inevitably see a reduction in motor tax, fuel excise and VRT receipts in the years ahead”, adding that in order to maintain Exchequer receipts, “tax structures must be amended over time in line with the changing vehicle composition”.

The TSG points to data from the International Council on Clean Transportation, which claims the average weight of passenger vehicles in Ireland increased by approximately 28 per cent between 2001 and 2022.

It suggests that a heavier vehicle fleet “creates further challenges in terms of traffic congestion, road infrastructure degradation, air pollution, road space and road safety”.

The TSG has based its proposal on France’s vehicle weight-based tax which has been in place since January 2022. France initially set the weight threshold at 1,800kg, with a tax rate of €10 per kg over this limit. The threshold was lowered to 1,600kg in 2024 and the tax rates were adjusted to range from €10 to €30 per kg over the threshold.

The French Government plans to further lower the weight threshold to 1,500kg by 2026, gradually increasing the number of vehicles subject to the tax. Full EVs remain exempt from the tax.

The TSG claims there is “scope to replicate” the French tax system here in Ireland, as it is designed to be “minimally distortive while also incorporating desired environmental objectives”.

Budget 2026 is expected to be announced in October.