Dublin: The 2025 budget, presented by Finance Minister Jack Chambers, is notable for its range of one-off payments, tax reforms, and various relief measures aimed at benefiting individuals and families across Ireland. Among the most significant changes is the increase in the top income tax band threshold from €42,000 to €44,000, providing notable savings for salaried workers. Factoring in reductions in the Universal Social Charge (USC), a person earning €100,000 annually is projected to save €1,109 in taxes.
Tax Changes Explained
For those earning €100,000, the breakdown includes €400 in savings from the PAYE system adjustments, and €250 from changes in tax credits. In addition, the USC rate on incomes between €25,000 and €70,000 has been reduced from 4% to 3%, resulting in a further benefit of €459 for those in this income bracket. Notably, personal and employee tax credits will both increase by €125.
Housing Support and Tax on Vacant Properties
Minister Chambers also announced the extension of the “Help to Buy” scheme until the end of 2029. This initiative allows prospective homeowners to claim up to €30,000 towards purchasing a new home. Furthermore, the vacant homes tax will increase to seven times the property’s existing local property tax rate, up from the current five times, effective November 2024.
The reduced VAT rate of 9% on gas and electricity will also be extended by six months, until April 2025, in an effort to ease energy costs for households.
Family and Caregiver Support
A key focus of the budget is providing relief for families and carers. The home carer tax credit will increase by €150, while the single person childcare credit will also see an increase of €150. Minister Chambers acknowledged the crucial role that carers play in society, reaffirming the government’s commitment to supporting families.
For the first time in several years, the blind tax credit will increase by €300. Additionally, the child benefit will be doubled in both November and December, although no permanent increase was included in the budget. Parents of newborns will receive a double child benefit payment of €420 in the first month after their child’s birth. Moreover, the qualified child payment will increase by €4 for children under 12 and €8 for those over 12. The incapacitated child tax credit will rise by €300, and the dependent relative tax credit by €60.
Social Protection and Carer Payments
As part of a €1.2 billion social protection package, all social protection payments will increase by €12 per week. Public Expenditure Minister Paschal Donohoe emphasised that these increases are intended to provide relief to those most in need.
In addition, maternity, paternity, adoptive, and parental payments will increase by €15, while the domiciliary care allowance will rise by €20. The carer’s support grant will see a significant increase of €150, bringing the total to €2,000. The means-tested carer’s allowance will rise to €625 for individuals and €1,250 for couples.
Hot School Meal Scheme Expansion
The government also announced that the Hot School Meal Scheme will be expanded to all remaining primary schools by next year. Minister Donohoe confirmed that an additional €1 billion will be allocated to double payments for those receiving long-term social protection benefits. This initiative is expected to benefit 1.4 million people, including pensioners, carers, lone parents, the long-term unemployed, and individuals with disabilities.
For detailed information: https://tascaccountants.com/your-guide-to-ireland-budget-2025
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