VRT change to push up prices for nine of the top 10 bestselling new cars

The decision to increase most Vehicle Registration Tax (VRT) rates by one per cent will affect prices for nine of the 10 bestselling models in the Irish new car market this year.

Cars with CO₂ emissions over 80g/km will see a one per cent increase in VRT, impacting tax bands three to 20. That emissions level means most regular hybrids will be hit with the tax rise, but most plug-in hybrid (PHEV) versions and all electric vehicles (EVs) will avoid the increase.

The change will see VRT increases on prices for the Toyota Yaris Cross, the current bestselling new car, along with the regular Yaris hybrid model.

The second most popular model on the market, Hyundai’s Tucson, will also face a tax rise, though its plug-in hybrid version (PHEV) with emissions of up to 73g/km avoids the increase.

Other models facing price increases to regular and hybrid cars include the Skoda Octavia, Kia Sportage, Skoda Kodiaq and Toyota Corolla.

Of the 128,268 new cars sold up to the end of September, 58 per cent fall into VRT tax bands that will see a one per cent increase. The Government estimates the change will generate €37 million in extra tax revenue in 2027.

The Minister for Finance Simon Harris also extended the current VRT relief on EVs until the end of 2028. The relief provides up to €5,000 off the calculated VRT due on electric cars.

While the industry expects EV and PHEV sales to equate to nearly 50 per cent of the new car market next year, Brian Cooke of the Society of the Irish Motor Industry said the VRT increase was unnecessary.

“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. However, he welcomed the extension of the VRT relief on EVs.