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The Minister for Finance, Mr. Michael McGrath TD and the Minister for Public Expenditure and Reform of Ireland, Mr. Paschal Donohoe TD presented Budget 2024 on Tuesday 10th October 2023. The majority of the changes to be introduced will be effective from 1st January 2024 unless stated otherwise.
This summary has been prepared by Strata Financial for the benefit of our clients dated 11th October 2024.
| Items highlighted in bold below represent changes announced in the budget.
INCOME TAX & USC |
|
| Tax rates | 2023 2024 |
| Standard tax rate | 20% 20% |
| Higher tax rate | 40% 40% |
| Standard rate bands | |
| Single/widowed | €40,000 €42,000 |
| Married couple/civil partnership one income | €49,000 €51,000 |
| Married couple/civil partnership two incomes | €80,000 €84,000 |
| One parent family | €44,000 €46,000 |
| Tax credits | |
| Single person | €1,775 €1,875 |
| Married couple/civil partnership | €3,550 €3,750 |
| Single person child carer | €1,650 €1,750 |
| PAYE | €1,775 €1,875 |
| Earned income | €1,775 €1,875 |
| Home carer (maximum) | €1,700 €1,800 |
| Incapacitated Child | €3,300 €3,500 |
| Universal Social Charge (USC) | |
| 2023 | 2024 |
| First €12,012 0.5% | First €12,012 0.5% |
| Next €10,908 2% | Next €13,748 (increase €2,840) 2% |
| Next €47,124 4.5% | Next €44,284 4% |
| Balance over €70,044 8% | Balance over €70,044 8% |
| Relevant income > €100,000 11% | Relevant income > €100,000 11% |
| PRSI | |
| Class A Employee PRSI 4% 4% | |
| Employer PRSI on weekly income 8.8% 8.8%
(not exceeding €410) (not exceeding €410) |
|
| Self-employed PRSI 4% 4% | |
| CORPORATION TAX | CAPITAL GAINS TAX |
| Standard rate 12.5% | General rate 33% |
| Knowledge Development Box 6.25%
(extended to 1st Jan 2027 & rate to increase to 10%) |
Entrepreneur relief (reduced rate) 10% |
| Non-trading income rate 25% | Annual exemption €1,270 |
| Rate for companies with
Turnover over €750m 15% |
|
| STAMP DUTY | CAPITAL ACQUISITION TAX |
| Residential property valued <€1m 1% | General rate 33% |
| Residential property valued >€1m 2% | Group A threshold €335,000 |
| Commercial property 7.5% | Group B threshold €32,500* |
| Shares (subject to some exceptions) 1% | Group C threshold €16,250 |
| DIRT 33% | DWT 25% |
| ARTIST EXEMPTION | €50,000 per annum |
| VAT | |
| Standard rate 23% | 23% |
| Reduced rate 13.5% | 13.5% |
| Reduced rate for hospitality sector – Reinstated to 13.5% on 1st September 2023 | |
| Farmers Flat Rate Addition 5% | 4.8% |
* Group B Threshold to apply to Foster Children
PRSI
All PRSI rates will be increased by 0.1% in October 2024.
Income Tax
Mortgage Interest Relief
The reintroduction of Mortgage Interest Relief for homeowners who are worst affected by the 10 European Central Bank rate increases. Relief will be available on the difference between amount of mortgage interest paid in 2022 vs 2023, at the standard rate of 20% income tax. The relief will be capped at €1,250 per property.
Tax Credit for Renters
Tax credit to increase to €750 for taxpayers who are paying rent on their principal private residence. There will also be an amendment to allow parents who pay for their student children who have tenancies in ‘Rent a Room’ or ‘digs’ accommodation to claim the Rent Tax Credit. This will be backdated to allow for claims to be made for the 2022 and 2023 tax years.
Microgeneration of Electricity
Electricity sold back to the National Grid will be exempt from Income tax, PRSI and the USC up to a profit of €400.
Corporation Tax
Rate
The current rate of Corporation tax is 12.5%. Ireland has agreed to support a deal to set a global minimum Corporation Tax rate of 15% for businesses with turnover in excess of €750m. This rate increase will only affect a small number of businesses operating in Ireland and therefore the 12.5% rate will continue to apply to the majority of businesses.
Research & Development (R&D) Tax Credit
- Increase in the rate from 25% to 30%.
- Increase from €25,000 to €50,000 of an R&D tax credit claim payable in year one.
Participation exemption
Participation exemption for foreign sourced dividends will be legislated for in Finance Bill 2024.
EIIS
- Investment period to be standardised to 4 years.
- Amount of investment eligible for relief doubled to €500,000.
Key Employee Engagement Programme (KEEP)
Extended until 31st December 2025 in Budget 2023 with the following amendments:
- Provision for the buy-back of KEEP shares by the company from employees
- Increase in the market value of companies from €3 million to €6 million.
Section 481 Film Relief
Extended to 31st December 2028 in Budget 2023 and the cap on eligible expenditure increased from €70 million to €125 million.
Farmers
Accelerated Capital Allowance (ACA) Scheme for Farm Safety Equipment
Extended to 31st December 2026.
Stamp Duty (Consanguinity Relief)
Extended for 5 years.
CGT
CGT farm restructuring relief extended to 31st December 2025 in Budget 2023.
Land Leasing
Income Tax Relief will only be available when land is owned for 7 years.
Housing & Landlords
Some changes include:
- Temporary tax relief on rental income for landlords of €3,000 for 2023, €4,000 for 2024 and €5,000 for 2025 and 2026 which will be disregarded for tax purposes at the 20% rate of tax. Property must remain in the rental market for the 4 years.
- Pre-letting expenses of up to €10,000 per residential property will be allowed for tax purposes for 2024 to encourage landlords to prepare such properties, which have been vacant for a period of 6 months or more, for letting.
- The Help-To-Buy Scheme for first-time buyers will be extended to 31st December 2025. This scheme allows first-time buyers a rebate of tax of up to €30,000.
- The Living City Initiative was extended to 31st December 2027 in Budget 2023. Tax relief is available on any refurbishment or conversion work carried out.
- The new Vacant Home Tax was introduced in Budget 2023 and applies to habitable residential properties that have been occupied for 30 days of less in a 12-month period. This tax will be chargeable at 5 (previously 3) times the basic rate of Local Property Tax (LPT) effective November 2023.
- The Residential Zoned Land Tax will be extended for 1 year. It is designed to encourage the activation of zoned and serviced residential development land for housing.
Employment Legislation
National Minimum Wage (NMW)
The NMW will increase from €11.30 gross per working hour to €12.70 as follows:
| 2023 | 2024 | % of NMW | |
| Aged 20 and over | €11.30 | €12.70 | 100 |
| Aged 19 | €10.17 | €11.43 | 90 |
| Aged 18 | €9.04 | €10.16 | 80 |
| Under 18 | €7.91 | €8.89 | 70 |
BIK
Company Car
The temporary reduction of an additional €10,000 in the OMV of a company car which applied for 2023 has been extended for 1 year.
Extension of BIK exemption for Electric Vehicles
The BIK exemption for electric vehicles will be extended to 2025. For BIK purposes the original market value of the electric vehicle will be reduced by €35,000 in 2024. This is in addition to the temporary reduction above.
CGT
Angel Investor Relief
A new relief is to be introduced to encourage investment into innovative SMEs. Conditions are:
- Investment period of 3 years
- Minimum investment of €10,000 in the form of newly issued fully paid up shares
- Holding of between 5-49%
- Enterprise Ireland will operate a certification process
Qualifying investors can avail of an effective reduced rate of CGT of 16% (or 18% if through a partnership) on a gain up to twice the value of their initial investment.
There is a lifetime limit of gains up to €3m.
Retirement Relief
Retirement relief upper age limit is to be increased from 66 to 70 from January 2025. A limit on transfers to a child up to age 70 will be introduced (currently unlimited up to 66 at present).
Entrepreneur Relief
A review of Entrepreneur Relief is to be carried out with particular focus on creation of employment.
VAT
VAT Registration Thresholds – Services €37,500 increased to €40,000, Goods €75,000 increased to €80,000.
Gas and Electricity Supplies – 9% rate of VAT extended for 12 months.
Audio Books and eBooks – reduced to 0%.
Solar Panels for Schools – reduced to 0%.
Excise Duty
Cigarettes & Tobacco Products – increased by 75 cent effective 10th October 2023.
Social Welfare
Changes include:
- All Social Welfare payments and pensions will increase by €12 per week.
- Qualified Child Increase by €4 to €46 per week for under 12s and to €54 per week for over 12s.
- A once-off payment of €400 for people on the Working Family Payment, in receipt of the Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and the Domiciliary Care Allowance.
- A once-off payment of €300 to those in receipt of the fuel allowance.
- A once-off payment of €200 to those in receipt of the living alone allowance.
- A once-off payment of €100 to those in receipt of the Qualified Child Payment.
- Double Social Welfare payments to include the Foster Care payment.
- The statutory foster care rate will be increased by the end of 2024 by €75 per week for children under 12 and €73 per week for children over 12, bringing it to €400 and €425 per week respectively.
- Double Child Benefit payment in Winter 2023.
- The Child Benefit payment will be extended to 18-year-olds in full-time education.
- Income threshold on the Working Family Payment will increase by €54 per week.
- Normal Christmas Bonus to be paid in early December.
- Roll out of the new pay-related benefit scheme to ensure those who lose their jobs get higher social welfare payments that are linked to their previous salaries.
Other
- Childcare fees to be cut by 25%.
- Third Level fees to be reduced by €1,000 in 2024.
- SUSI student grant to increase by €300.
- New Postgraduate grant of up to €2,300.
- Public transport – Young Adult Card eligibility to increase to include 24- & 25-year-olds (currently includes 19 to 23 year olds).
- Free school books for up to Junior Cycle in secondary school.
- The hot school meals programme will be expanded to a further 900 primary schools in April 2024.
- Electricity credits for all households totalling €450 will be made in 3 instalments of €150.
- Parents benefit will be extended to nine weeks from August 2024
- Domiciliary Care Allowance will increase by €10.
This is a summary of the Minister’s Budget Speech and is not intended to be a comprehensive guide. Please contact any of the Strata Financial team for further information.
Email: contact@stratafinancial.ie Tel: +353 1 6311400
