Continuing the trend over the last number of years, much of the budget details have already been leaked. And while the economy has performed relatively well this year, the room for manoeuvre was flagged as being limited.
Overall the budget favours spending increases over tax cuts by three to one. On the tax side of things, €500 million in cuts is offset by measures increasing tax revenue worth €195 million.
Reductions in universal social charge (USC) represent the main benefit for most people, with the key 5.5 per cent rate cut to 5% per cent.
What are the key points?
- Tax rates & income bands remain unchanged
- Tax credit for self-employed increased by €400 to €950
- 0.5% cut in each of the 3 lowest USC bands
- DIRT will reduce by 2% each year over the next 4 years (from 41% to 33%)
- New Help to Buy incentive for first time buyers
- Rented residential property interest relief increased from 75% to 80%
- Mortgage interest relief extended to 2020
- €1.2bn in funding for housing, with a goal to deliver 47,000 new social housing units by 2021
- €5 per week increase in the state pension from March 2017
- Capital Gains Tax further reduced to 10% for the sale of a business up to €1 million
- €290 million earmarked to restore civil service pay cuts
- Rent a room tax exemption increased by €2,000 to €14,000
- 800 new Gardai to be recruited in 2017, and 2,400 new teaching posts announced
- Inheritance tax reduced, especially from parents to children, where the threshold increases to €310,000
- Tourism & Hospitality VAT rate of 9% unchanged
- Cigarettes up 50 cents, alcohol & fuel duties unchanged
- A new Sugar Tax by April 2018
- Home Renovation Incentive further extended until 31 December 2018
We hope this information will be of benefit to you and your business. As always we are available should you have any further questions.
– – – – –