Personal Tax Measures
- Effective from 1st January 2024, the following tax credits will increase by €100 p/a
- Personal Tax Credit €1,875
- Earned Income Credit €1,875
- PAYE Credit €1,875
- Home Carers Credit €1,800
- Single Person Child Carer Credit €1,750
- The incapacitated child tax credit will increase from €3,300 to €3,500.
- Rent tax credit will increase by 50%
- Single Person €750
- Couple (jointly assessed) €1,500
- The terms of the relief have been enhanced to allow student children who have tenancies in “Rent a Room” of “Digs” style accommodation to claim the rent credit for 2022 and 2023.
- The standard rate tax band will increase by €2,000 to €42,000, with proportionate increases for single person child carers, married couples, and civil partners.
- Introduction of a one-year mortgage interest tax relief for homeowners with an outstanding mortgage on their primary dwelling house of between €80,000 and €500,000
- Mortgage interest relief may be claimed for the 2023 tax year in respect of the increased interest charges paid in the period relative to the 2022 interest charges.
- The relief is capped at €1,250 per property.
- The third rate will decrease from 4.5% to 4%,
- There has been an increase in the 2% USC rate band from €22,920 to €25,760, and
- The reduced USC rates for medical card holders has been extended to the end of 2025.
- Effective from 01 October 2024, all PRSI rates will increase by 0.1%.
Social Welfare Benefits
The key social welfare enhancements were as follows.
- Minimum wage has been increased by €1.40 to €12.70.
- Households will receive three further credits of €150 each over the winter period to assist with rising energy costs (€450).
- Weekly social protection payments will increase by €12 per week.
- Recipients of the living alone allowance and fuel allowance will receive lump-sum payments of €200 and €300 respectively.
- For those in receipt of social welfare protection payments, the Christmas bonus will be paid in early December 2023. In addition, a once off double payment will be paid in January 2024.
- The domiciliary care allowance will increase by €10 per month. For recipients of the Carer’s support grant, disability allowance, blind pension, invalidity pension and domiciliary care allowance, a once-off payment of €400 will be made before Christmas.
- Child Benefit
- The rate will increase by €4 to €46 per week for under 12s and to €54 per week for overs 12s.
- Child benefit payment has also been extended for children over 18 years of in full time education.
- A once-off double payment will be made in respect of each qualifying child before Christmas.
- The hot school meals programme will be extended to a further 900 primary schools in April 2024.
- Free school book scheme has also been extended to all junior cycle pupils in secondary schools.
- From 1st September 2024, there will be a further 25% reduction in childcare costs under the national childcare scheme.
Financial & Tax Impact of Budget 2024
- From 1st January 2024, the VAT registration threshold for services will increase from €37,500 to €40,000. For goods the registration threshold will increase from €75,000 to €80,000.
- The temporary 9% VAT rate for the supply of gas and electricity has been extended for a further 12 months.
- The VAT rate applicable for audio and e-books will be reduced to 0%.
- The funds available for the VAT Compensation Fund are set to increase from €5m to €10m.
- The excise duty on a packet of 20 cigarettes will increase by 75c, with a pro-rata increase on all tobacco products over the next year.
- The increase in the fuel excise, which was due to come into effect on 31 October 2023, has been deferred to 2024.
Property Based Taxes
- The Vacant Homes Tax will be increased from 3-times the property’s existing base rate of LPT to 5-times the base rate. This increase will come into effect for the next chargeable period commencing this November.
- The original liability date for residential zone land tax has been deferred to 1 February 2025 to allow further engagement between landowners and local authorities.
- The Help-to-Buy scheme has been extended to December 2025.
- In recognition of vital role small-scale landlords play in the Irish rental market, a new temporary tax relief has been introduced. Rental income will be disregarded for income tax purposes at the standard rate as follows
- €3,000 for 2024
- €4,000 for 2025
- €5,000 for 2026 and 2027
- The following changes to CGT retirement relief will come into effect from 1st January 2025
- The upper age limit for claiming retirement relief will be extended from 65 to 70, and
- There will be a new limit of €10m on the relief available for disposals to a child up to the age of 70.
- A new capital gains tax relief will be introduced to encourage “angel investment”.
- The relief provides for a lower rate of CGT of 16% (or 18% where held through a partnership) for disposals of qualifying investments for gains up to a value of two times the original investment, with the standard 33% CGT rate continuing to apply to gains above this limit,
- The investment must be made in the form of fully paid-up newly issued shares costing at least €10,000,
- The investment must be held for a minimum period of three years, and
- The individual must hold between 5% and 49% of the ordinary issued share capital of the Company.
- Capital Acquisitions Tax: The Group B threshold should now apply in respect of all gifts/inheritances received by foster children from their foster siblings, the parents/ brother/sister of their foster parents etc.
Corporation Tax & Tax Based Incentives Schemes
- Legislation to implement the 15% minimum rate of corporation tax under the OECD Pillar Two Agreement will be published next week.
- A participation exemption for foreign sourced dividends should be legislated for in Finance Bill 2024.
- R&D Tax Credit
- The rate of the tax credit will increase from 25% to 30%.
- The amount of the credit available to be refunded to a Company as part of its first-year instalment has been increased from €25,000 to €50,000.
- Changes to the EII Scheme – Effective from 1st January 2024
- Standardising the minimum holding periods for all investments to four years.
- The maximum amount on which an investor can claim relief has increased from €250,000 per annum to €500,000.
- KEEP Scheme
- The scheme has been extended to 31 December 2025.
- The lifetime Company limit for KEEP shares has been increased from €3M to €6M.
- These charges are subject to a ministerial commencement order.
Energy & Climate Measures
- BIK on Company Cars.
- Relief of €10,000 in the Original Market Value (OMV) of certain vehicles has been extended to 31 December 2024.
- The tapering mechanism for the BIK relief on electric vehicles has been enhanced by reducing the deduction for the OMV as follows:
- Current deduction of €35,000 to be extended to 31 December 2025
- Reduction to €20,000 in 2026, and
- Reduction to €10,000 in 2027.
- The VRT relief for battery electric vehicles is being extended to the end of 2025.
- The VAT rate applicable for the supply and installation of solar panels in schools will be reduced from 13.5% to 0%, effective from 1st January 2024.
- The carbon rates for petrol and diesel per tonne of carbon dioxide emitted increased from €48.50 to €56 on 11 October 2023.
- The accelerated capital allowance scheme available to companies and unincorporated business who incur capital expenditure on specified products has been extended for another two years to 31 December 2025.