Ireland’s Finance Minister Jack Chambers Tuesday unveiled a €10.5 billion budget for 2025, including a €2.2 billion cost of living package in a bid to support low and middle-income earners.
Here are the key highlights of Chambers’ budget speech presented in Dáil Éireann:
- Income Tax — Chambers has raised the income tax standard rate threshold by €2,000 to €44,000. It means that people will now pay the lower 20 per cent rate of tax on earnings up to €44,000. Proportionate increases will be made applicable for married couples and civil partners. Previously, the standard rate of income tax threshold was €42,000.
- Other measures — An increase of €125 to the main tax credits, which is the Personal, Employee and Earned Income Credits. The national minimum wage has been increased by 0.80 cent to €13.50 per hour. Earlier, the minimum wage across Ireland was €12.70 per hour. A cut to the Universal Social Charge has also been announced in the budget. The USC rate of 4 per cent will be reduced to 3 per cent now. As a result of the increases to the main tax credits, a single person earning €20,000 or less in 2025 will now be outside of the income tax net.
- Rent tax credit — The rent tax credit has been hiked by €250, bringing it to €1,000 and €2,000 for a jointly assessed couple for 2025. Similarly, the rent tax credit has been increased to €1,000 and €2,000 for a jointly assessed couple for 2024 also. Previously, the maximum value of the rent tax credit was €750 for single person and €1,500 for married couples or civil partners.
- Energy credit — The budget announced an energy credit of €250 for all households to be paid in two instalments — one before the end of the year and one after. A further €300 lump sum payment will be made to recipients of the fuel allowance in November 2024.
- Extension of Help to Buy scheme — This scheme has been extended until the end of 2029 in a bid to support first time property purchasers. So far, the government has supported over 50,000 individuals or couples to buy their own home.
- Inheritance Tax — The amount that a person can receive as a gift or inheritance from a relation before having to pay Capital Acquisitions Tax will be increase from €335,000 to €400,000.
- Double child benefit payment — In addition to the first month of child benefit, a €420 payment will be made to families for each newborn child. There will also be a double payment of the foster care allowance.
- Healthcare and Education — 495 new beds will be introduced across hospital and community services. There will be continued support for women’s health measures, including increased access to IVF and Hormone Replacement Therapy free of charge. Meanwhile, the Free Schoolbooks initiative to all transition and senior cycle pupils in recognised post-primary schools will be extended, while the Hot School Meal programme will similarly be extended to all primary schools. The €1,000 reduction in the student contribution fee will remain and funding will also continue for the continued school-transport fee reduction and State exam fee waiver. The government has also announced an increase in certain PhD stipends.
- Reduced VAT rate — To continue supporting households and businesses, the government has extended the 9 per cent reduced VAT rate for gas and electricity for another six months to April 30, 2025.
- Mortgage Interest Relief — Relief for mortgage interest holders was also announced in this budget, with the government extending the Mortgage Interest Tax Relief for one further year in a bid to assist mortgage holders in respect of the increase in interest paid in 2024 over 2022.
For more comprehensive details, click this link: https://www.gov.ie/en/publication/cb193-your-guide-to-budget-2025/