VAT

The reduced rate currently applying to electricity and gas supplies (9%) is being extended by 12 months to 31 October 2024.

From 1 January 2024:

• The VAT registration threshold for services will increase from €37,500 to €40,000 and for goods will increase from €75,000 to €80,000.
• The VAT rate for audio books and e-books will reduce from 9% to zero.
• VAT on the supply and installation of solar panels, already available for private dwellings, is being extended to schools with effect from January 1st, 2024.
• The flat-rate addition scheme which applies to un-registered farmers will decrease from 5.0% to 4.8%.

The annual fund for the Charities VAT compensation scheme will be increased from €5 million to €10 million.

Housing

• Homeowners – a new and temporary one-year mortgage relief for those with an outstanding mortgage balance on their home of between €80,000 and €500,000 on 31 December 2022. The relief is capped at €1,250 per property.
• Renters – the rent tax credit has been increased from €500 per year to €750 from 2024. Parents paying for student accommodation can now claim this credit – both going forward and retrospectively for the years 2022 and 2023.
• Landlords– a new tax relief for landlords will be introduced for a 4 year period for tenancies registered with the Residential Tenancies Board or a residential letting to a public or local authority. The relief is subject to the following limits: €3k in 2004, €4k in 2025, rising to €5k for 2026/27.
• The help to buy (HTB)scheme has been extended, at current rates, for a further year until December 2025.

Vacant Homes Tax has been increased from three to five times the rate of Local Property Tax.

CGT and tax reliefs

There are no changes to tax rates but the standard (20%) rate band has been increased: for individuals – from €40,000 to €42,000; and for couples – from 49,000 to €51,000, with an additional boost for dual income families.

• Age limit changes in CGT:Changes to CGT retirement relief include extending the upper age limit to 70 (from 66), so the gain limit of €3 million will  only apply from age 70 from1 January 2025. This measure will support the intergenerational transfer of businesses and farms but…
• New limit of €10m on qualifying disposals to a child upto the age of 70. This will be introduced on 1 Jan 2025for gifts when the individual is under 70.

These are significant changes, so make sure to take advantage of the period before the changes are introduced to plan any change to succession.

• Revised Entrepreneur Relief: The Budget papers include a review of this CGT relief, recommending the continuation of the relief but with little relaxation of the qualifying conditions.

Tax credits and one-off payments

1. Energy Credit:Households will receive a €450 electricity credit, applied to bills in 3 instalments of €150. The first instalment to be made in December with the remaining instalments being paid in early 2024.
2. Child Benefit: Parents in receipt of Child Benefit will receive a double payment in December 2023.

Tax credits

• Single/ Widowed Person or Surviving Civil Partner Tax Credit will increase by €100 from €1,775 to €1,875.
• Married Couple or Civil Partnership Tax Credit (€200), from €3,550 to €3,750.
• Home Carer Tax Credit, up €100 from €1,700 to €1,800.
• Employee (PAYE) tax credit will increase by €100 from €1,775 to €1,875.
• Earned Income Tax Credit will increase by €100 from €1,775 to €1,875.
• Single Person Child Carer Tax Credit, up €100 from €1,650 to €1,750.
• Incapacitated Child Tax Credit increases €200 from €3,300 to €3,500.
• Sea-going Naval Personnel Tax Credit of €1,500 will be extended for 2024.

One-off payments

To be made to those in receipt of these payments in November 2023:

1. €400 payment – Carer’s Supports Grant, Disability Allowance, Invalidity Pension, Blind Pension and the Working Family Payment.
2. €300 payment – Fuel Allowance
3. €200 payment – Living Alone Allowance
4. €100 –  Qualified Child payment.
5. A Christmas bonus of 100% of an individual’s weekly payment will also be paid in December 2023 to recipients of long-term social welfare payment, and a cost of living bonus will be paid in January 2024.

Environment and education

1. The Minister has announced 2 funds: a Future Ireland Fund to help to protect living standards and public services for current and future generations; and a new Infrastructure, Climate and Nature Fund which will have a climate and nature component worth over €3billion. 
2. Carbon Tax on fuels have increased from the current rate of €48.50 to €56.00 per tonne of CO2.
3. Forecourt fuel prices have also increased, adding €1.28 and €1.48 to the cost of a 60-litre fill of petrol and auto diesel, respectively.
4. The Student Contribution Fee will be reduced on a once-off basis by €1,000.

From September 2024, the free school books scheme will extend to the first 3 years of secondary school education in recognised secondary schools within the free education system.