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New VRT and Road Tax Systems from 1st July 2008

From 1st July 2008 a new way of working out the Vehicle Registration and Road Tax on motor vehicles will be put in place by the Revenue Commissioners. Currently the system is based on the engine size (cc) of the car. The new system will be based on the CO2 emissions produced from the car. That is the amount of carbon dioxide in grams produced by the car in 1 kilometer. 


Moving to a CO2 based system will mean that less fuel efficient cars that burn more fuel and emit higher levels of CO2 will pay more for registration and road tax. If you buy a car with low emission you will pay less for the car and the yearly tax bill will be reduced. The clear aim of this new motor tax system is to influence the purchasing decisions of consumers by reducing the cost to the buyers of low-emitting cars and charging a premium on less efficient vehicles.

However because the new system roll out will not take place until 1st July 2008, there is period of time up to the end of June that the old system will still be used. The main reasons behind the time frame of changing over to the new system is to allow the Distributors and Dealers time understand the new system and place orders for vehicles to insure they order car that will sell.

With the current system it was a case of pricing vehicles in accordance to engine size, this made the smaller petrol engines cheaper. Now with the New CO2 system diesel and bio fuel cars will turn out to be the cheaper option for purchase and the yearly road tax will be reduced.

If you are considering changing your car this year the main question on people’s minds is should I change it now or should I wait until the new VRT charges are applies. The is no simple answer but the only recommendation is do your research, ring the dealer and ask them if the price of the car is going up in July and how much the Road tax will be.

Example: Ford Focus 1.6 in petrol and diesel. New Car or imported second hand

Petrol Car: Emissions 180g CO2Registered in June 2008: Road Tax €391 VRT 25%
Registered in July 2008: Road Tax €600 and VRT 28%

Diesel Car: Emissions 127g CO2Registered in June 2008: Road Tax €391 VRT 25%
Registered in July 2008: Road Tax €150 and VRT 16%

It is easy to see if you want a petrol car buy now of a diesel wait until July.

Actual price changes in July could not be confirmed and as it is thought most distributors will take the opportunity to restructure the pricing to coincide with the new system. So we will not be sure of exact pricings until closer to the date.

VRT or Vehicle Registration Tax is a duty payable on first registration of a motor vehicle in the State. Currently the rates that apply to a car registered now are as follows, CO2 information is available on www.sei.ie