Ireland’s Finance Minister Jack Chambers on Tuesday unveiled a €10.5 billion budget for 2025, including a €3 billion earmarked for infrastructure and €2.2 billion cost of living package in a bid to support low and middle income earners.
The €3 billion for infrastructure spending “will help build on current progress, eliminating key infrastructural bottlenecks more rapidly, and help lay the foundations for further improvements in living standards and competitiveness”, said Chambers, who delivered his first and the incumbent government’s final budget before the general election.
Chambers raised the income tax standard rate threshold by €2,000 to €44,000. It essentially means that people will now pay the lower 20 per cent rate of tax on earnings up to €44,000. Proportionate increases will be applicable for married couples and civil partners.
Chambers also increased the main tax credits, the Personal, Employee and Earned Income Credits, by €125. Additionally, the Finance Minister announced a reduction of one per cent to the Universal Social Charge, which now stands at 3 per cent.
Significantly, the government also hiked the national minimum wage by €0.80 per hour to €13.50 per hour. A full time worker on the minimum wage will see an increase in their net take home pay of approximately €1,424 on an annual basis, the Finance Minister said. A single person earning €20,000 or less in 2025 will now be outside of the income tax net, as a result of the cumulative increases to the main tax credits.
In the budget speech, the government also sought to support renters across the country by increasing the rent tax credit by €250, bringing it to €1,000 and €2,000 for a jointly assessed couple for 2024 and 2025.
Stating that home ownership remains a key priority for this government, Chambers extended the Help to Buy scheme until the end of 2029 in a bid to support first-time property purchasers.
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/