My Budget 2025 Summary

1st October 2024

The Highlights of Budget 2025: Key Takeaways

Income Tax

• The standard rate income tax band will be increased by €2,000 to €44,000 for single persons and to €53,000 for married couples with one earner; no other changes to income tax rates or bands.

• The 4% Universal Social Charge rate will be reduced to 3%.

• The entry point for the new 3% Universal Social Charge rate will be increased by €1,622 to €27,382.

• The Personal, Employee (PAYE) and Earned Income (Self-Employed) Tax Credits will be increased by €125 to €2,000.

• The Home Carer tax credit will be increased by €150 to €1,950.

• The single person child carer tax credit will increase by €150 to €1,900.

• The incapacitated child tax credit will increase by €300 to €3,800.

• The dependent relative tax credit will increase by €60 to €305.

• The blind tax credit will increase by €300.

• The Rent tax credit will be increased from €750 to €1,000 per year. 

• Mortgage Interest Relief extended for another year.

• The sea-going naval personnel tax credit of €1,500 will be extended for 5 years to the end of 2029.

• The Help to buy (HTB) scheme will be extended in its current form until December 2029.

• Tax relief on pre-letting expenses for landlords extended to December 2027.

• Vacant homes tax will be increased from 5 to 7 times the property’s existing Local Property Tax rate, with effect from November 2024.  This tax applies to residential properties which are occupied for less than 30 days in a 12-month period.

• Regarding the Residential Zoned Land Tax, there will be a targeted exemption available to landowners if they seek to have their land re-zoned to reflect the activity they carry out on the land.

Corporation Tax

• The main Corporation Tax rate will remain unchanged at 12.5% for companies with revenues less than €750m.

• The first-year payment threshold for the Research & Development Tax Credit will be increased from €50,000 to €75,000.

• A participation exemption for certain foreign dividends will be introduced from the 1st January 2025.

• The Employment Investment Incentive, Start-up Relief for Entrepreneurs & Start-up Relief for Entrepreneurs will be extended for another 2 years.

• Relief available under the Start-up relief for entrepreneurs will be increased from €700,000 to €900,000.

• The CGT relief targeted at angel investors in innovative start up companies will be amended to provide a lifetime limit on gains to which the relief applies from €3m to €10m.

• The amount that can be claimed under the Employment Investment Incentive Scheme (EIIS) will be doubled from €500,000 to €1,000,000.

• The Motor Insurers Insolvency Compensation Fund levy will be reduced from 1% to zero.

• The accelerated capital allowance scheme for gas and hydrogen-powered vehicles will be extended for a further year.

• There will be an 8% uplift in the Section 481 Film Tax Credit, this is subject to state aid approval.  This will apply to feature film productions with a maximum qualifying expenditure of €20 million.

• There will be a new tax credit for Unscripted Production at a rate of 20% on qualifying expenditure up to €15 million, subject to state aid approval and similar to the other audio visual reliefs, the project will be required to pass a cultural test.

• The accelerated capital allowances scheme for energy efficient equipment will be extended for a further year.

• The Bank Levy will be extended for another year.

Small Benefit Exemption

• The annual limit for the Small Benefit Exemption will increase to €1,500 and the number of non-cash benefits will increase to 5 in a single year.

Benefit in Kind – Motor Vehicles

• In relation to the Benefit in Kind on company cars, the temporary universal relief of €10,000 to the Original Market Value will be extended for another year.

• For an employee with an electric company vehicle, this will give an overall benefit in kind relief of €45,000 in 2025.

• There will be a benefit in kind exemption for the provision of electric vehicle chargers at the home of a director or employee.

VRT

• There will be a VRT amendment for battery electric commercial vehicles so that they can qualify for the €200 VRT rate.

• An emissions-based approach will be introduced for B commercial vehicles, which will provide for a lower 8% rate for category B vehicles with a CO2 emission of less than 120grams per KM.

Vat

• The Vat Registration thresholds for businesses will be increased from €40,000 to €42,500 for services and from €80,000 to €85,000 for goods.

• The reduced 9% Vat rate applicable to Electricity & Gas will continue until the 30th April 2025.

• The VAT rate on the installation of heat pumps will be reduced from the standard rate (23%) to zero from the 1st January 2025.

• No other changes to Vat rates.

Capital Taxes

• The Group thresholds for Capital Acquisitions Tax (CAT), which apply to gifts and inheritances, will increase for Group A from €335,000 to €400,000, for Group B from €32,500 to €40,000 and for Group C from €16,250 to €20,000.

• The upper age limit for Retirement Relief extended from 65 until the age of 70 will be retained.

• In relation to retirement relief, where there are disposals by the child or children above €10 million within 12 years of receiving the assets, a clawback of the retirement relief will apply.

• The 6-year active farmer test for agricultural relief will be extended to the person who provides the gift or inheritance

Stamp Duty

• The rate of stamp duty applicable to residential property valued at €1.5 million or above will be increased to 6% with immediate effect. The existing rate will continue to apply to any value up to €1 million & 2% on values above €1 million, with a third rate of 6% on any value above 41.5 million.

• The higher rate of stamp duty on the bulk acquisitions of houses will be increase from 10% to 15% with immediate effect.

• The Young Trained Farmer stamp duty relief will be amended so it is available where it is claimed by an individual farmer who carries on the farm business through a company.

• The Stamp duty relief which applies to farmers who lease land will be amended to include farmers who have chosen to incorporate their farming business.

Excise Duties

• The price of 20 cigarettes will increase by €1, with pro rata increases on other tobacco products.

• A domestic tax on e-cigarettes and vaping products will be introduced in 2025.  The tax will apply to all e-liquids at a rate of 50 cent per ml of e-liquid.

Carbon Tax

• The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €56.00 to €63.50 from the 9th October next. 

Farming

• The flat rate addition for farmers will be increased from 4.8% to 5.1% from 1st January 2025

• General stock relief, stock relief for young trained farmers and stock relief for registered farm partnerships will be extended to the end of 2027.

• The relief for young trained farmers will be amended so it will be available where it is claimed by an individual farmer who carries on the farm business through a company.

Welfare

• There will be a €12 increase in the state pension & other welfare recipients in 2024.

• An October bonus of 100% will be paid to all social welfare recipients.

• The qualified child payment will be increased to €62 per week for Over 12’s and to €50 per week for Under 12’s.

• The carers allowance means test disregard will be increased to €625 for a single person and €1,250 for a couple.

• The Domiciliary Care Allowance will increase by €20 to €360.50 per week.

• Carers’ Support Grant will be increased by €150 to €2,000.

• The carers allowance will be made a qualifying payment for the fuel allowance.

• Maternity, Paternity, Adoptive and Parents payments will be increased by €15.

• A newborn grant of €420 will be paid to families of each newborn child, in addition to first month of child benefit.

• The hot school meals programme will be expanded to all remaining primary schools in 2025.

• Free schoolbooks will be extended for all transition and senior cycle pupils in recognised post primary schools.

• Free public transport to be extended all children aged 5 & 8 years old.

Cost of Living (Once-off) Measures

• An Electricity Credit of €250 for all households to be paid in two instalments of €125 before and after Christmas.

• An additional lump sum payment of €400 to those in receipt of the working family payment.

• An additional lump sum payment of €400 to those in receipt of the Carer’s Support Grant, Disability Allowance, Blind Person, Invalidity Pension and Domiciliary Care Allowance in November.

• A double payment of Child Payment, worth an additional €140 for each child, will be made to all qualifying households in November and December.

• A double payment of the Foster Care allowance will also be made this year.

• A €300 lump sum payment will be made to recipients of the Fuel Allowance in November.

• All recipients of the Living Alone Allowance will receive a once-off payment of €200.

• An extension of the fee reduction on school transport services for a further year.

• An extension of the fee waiver for students sitting state exams.

• The continued reduction in the Student Contribution of €1,000 for eligible students.

• A once-off reduction of approximately 33% in the contribution fee for apprentices in higher education 

• An increase in the Post Graduate Tuition fee contribution by €1,000 for student grant recipients

Other

• The national minimum wage will increase by €0.80 per hour to €13.50 per hour from 1st January 2025.

We hope you find this information useful.  If you have any questions, feel free to contact us.

Landline/WhatsApp: +353 (0) 64 6632105

Email: info@timothykelliher.ie

Web: www.timothykelliher.ie