Budget 2017 - The Breakdown

The Minister for Finance, Michael Noonan and the Minister for Public Expenditure, Paschal Donohoe announced the first details of Budget 2017. The main taxation measures are summarised below. The budget lacked any real headline making topics and most of it had been leaked in the weeks previous.  I would have expected more action in light of Brexit, however the real detail will be in the Finance Act, expected to be released within the next 2 weeks. And of course, TD’s are set to give themselves a pay rise in line with other senior public servants! From the details announced yesterday, the main points are summarised below:

Personal: Efforts to assist the squeezed middle have been brought in, though not significant, they are at least going in the right direction

• The Earned Income Tax Credit for self-employed increased by €400 to €950, this is another welcome break for the self-employed.

• Cuts to three lowest rates of Universal Social Charge - 1% rate cut to 0.5%; 3% rate cut to 2.5%; 5.5% rate cut to 5%

• 5% USC rate ceiling increased from €18,668 to €18,772

• DIRT will be reduced by 2% each year to 2020 (41% to 33%)

• CAT limits have been increased

• Home renovation scheme extended for two years to end of 2018

• Mortgage Interest Relief will be extended beyond December 2017 to 2020

• Help to Buy rebate scheme for first time buyers of new property

Business: With Brexit looming, a lot of focus over the next 2 years will be directed to this sector, as a result there have not been many changes.

• €15m to help progress National Broadband Plan (not even enough for an average town in reality)

• Special Assignee relief and Foreign Earning Deduction rules relaxed

• A reduction in the lower rate of CGT from 20% to 10% for disposals of certain business assets (including shares) up to a limit of €1 million.

• 9% VAT rate for tourism and hospitality industry will be retained

Landlords: The Minister is trying to encourage more property letting in order to ease the housing crisis.

• Tax relief on mortgage interest increased to 80%
• Rent a room relief extended to €14,000

And Finally…

• Sugar tax and the increase of a packet of cigarettes has been brought in… just to give people something to talk about!!