Finance Minister Jack Chambers and Public Expenditure Minister Paschal Donohoe
Gone are the days when budget day is back-to-back surprises. This year was no exception, with most of the significant measures already known and reported on before Ministers Jack Chambers and Paschal Donohoe took to their feet to deliver their speeches in the Dáil.
However, there were some surprises in what was unveiled this afternoon. Here are seven things we didn’t know were coming.
‘Mansion tax’
The Government will introduce a new “mansion tax”. It means stamp duty will increase to 6pc for residential properties worth €1.5m and will come into effect from tonight.
The existing stamp duty rate will continue to apply to homes worth up to €1m and 2pc on residential properties with a value of over €1m.
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Insurance levy abolished
The Motor Insurers Insolvency Compensation Fund levy will be abolished, reducing from 1pc to 0pc from January 1. The move will benefit 2.2 million policy holders. Last year the rate was reduced from 2pc to 1pc.
Reduced Vat on heat pumps
The Vat rate on the installation of heat pumps has been cut to 9pc from the current standard rate of 23pc.
Mr Chambers said the measure will “complement the Government’s National Retrofit Plan to transform Ireland’s housing stock”.
€125 tax credit
While it was reported there would be a change to tax credits as part of the €1.6bn personal income tax package, personal tax credits will go up by €125.
Worker’s bonus
The small benefits exemption scheme, which was €1,000, has now risen to €1,500.
It allows employers to give non-cash bonuses to employees up to that value each year. They are usually paid in the form of vouchers.
Tax changes
Other measures in the income-tax package include the reduction of the USC rate by 1pc, bringing the rate to 3pc. The standard rate cut-off point was increased by €2,000 to €44,000.
Tax relief on gym membership up for discussion
Last week, Fianna Fáil backbenchers were calling for tax relief on gym memberships in a move to incentivise people to look after their physical health.
While the measure didn’t get the sign-off for this budget package, Mr Chambers said it was something officials would look at for future budgets.
“I believe there is merit in examining how the tax system can help to achieve greater participation in sport and fitness activities, including through gyms, for example,” said Mr Chambers.
