Budget 2017 Highlights

    Personal Tax

    USC rates decreased to :

    0.5% on first €12,012,

    2.5% on income between €12,013 and €18,772 and

    5% on income between €18,773 and €70,044

    No change in top rate of USC at 8% and no change in top rate of USC of 11% for self-employed individuals with income in excess of €100,000

    €100 increase in Home Carers' Credit to €1,100

    There was no change to the USC exemption threshold of €13,000

    There were no changes to the PAYE rates

    Earned Income Credit introduced in 2016 for the self-employed will increase from €550 to €950

    The deduction for interest on rented residential property will increased to 80% in 2017 with a commitment that the Finance Bill will contain measures to increase this each year by 5% until full relief applies

    €1,270 income tax credit for Fishermen

    Exemption from Income Tax for income from renting a room in your home is increased by €2,000 to €14,000 from 2017

    Home Renovation Incentive (HRI) Scheme

    The HRI scheme has been extended for a further 2 years, until 31st December 2018

    Living City Initiative

    The Living City Initiative which aims to assist the regeneration of retail and commercial districts and encourage families to live in historic buildings in city centres is being amended to encourage an increase in the take-up of the scheme. This involves extending the availability of the scheme to landlords, while for residential applicants it removes the restriction on the maximum floor size of the property, removes the requirement that the property must have been previously used as a dwelling, and reduces the minimum amount of expenditure needed to qualify.

    Help to Buy Scheme

    New income tax rebate of up to 5% under a Help to Buy scheme for new homes valued up to €400,000. Pro rata rates will apply to lower priced houses. A full rebate calculated on €400,000 will also apply to houses between €400,000 and €600,000. No rebate will be paid on new house purchases in excess of €600,000. To qualify the property must be a new build and applicants must take out a mortgage of a least 80% of the purchase price. The scheme will run until the end 2019. The scheme is not available to second-hand houses.

    €1.2bn in funding for housing, with 47,000 new social housing units by 2021

    Additional €105m to enable 15,000 more households to avail of Housing Assistance Payment Scheme

    Mortgage Interest Relief will be extended beyond December 2017 to 2020

    SARP and FED

    The Special Assignee Relief Programme (SARP) and the Foreign Earnings Deduction (FED) are being extended to 2020.

    In addition, Colombia and Pakistan will be added to the list of qualifying countries for FED purposes and the number of days to be spent in a qualifying country will be reduced from 40 days to 30 days.

    Start Your Own Business

    The scheme was due to end at the end of 2016 but it has been extended until 31st December 2018.

    Deposit Interest Retention Tax (DIRT)

    The rate of DIRT will be decreased by 2% each year for the next 4 years until it reaches 33%. The rate for 2017 will be 39%.

    VAT

    There is no change to the 9% VAT rate for the tourism sector in 2017.

    The Flat Rate Addition which applies to farmers who are not registered for VAT will be increased by 0.2% from 5.2% to 5.4%.

    Social Welfare

    State pension will rise by €5 from March

    There will be a €5 increase in all weekly social welfare payments in line with State pension

    The Christmas bonus for those on social welfare will rise to 85%

    Employment

    2,400 additional teaching posts announced, of which 900 will be resource teachers

    800 new gardaí to be recruited in 2017, with more civilian staff to be hired too to free up desk-bound officers

    1,000 additional nurses and midwives to be recruited

    Childcare - Single Affordable Childcare Scheme

    The single affordable childcare scheme will be introduced from September 2017 and will provide subsidies to families to offset the cost of childcare.

    Under the scheme a universal subsidy will be paid for all children aged 6 months to 3 years who are attending a TUSLA registered childcare provider or child-minder. In addition to this universal payment, a means-tested subsidy based on the income of the parents will also be provided for children aged between 6 months and 15 years.

    Medical

    Medical Card for all children who receive domiciliary care allowance

    Additional €15m to NTPF to reduce hospital waiting lists

    €25 cap on prescription charges for over 70s reduced to €20 from 1 March

    Other Highlights

    Excise duty on pack of 20 cigarettes to go up by 50 cents

    Intention to introduce tax on sugar-sweetened drinks in April 2018 after public consultation

    10c rise in minimum wage as Government accepts Low Pay Commission recommendation

    €28m increase in allocation for emergency accommodation to €100m

    €15m to help progress National Broadband Plan

    €319m to be spent on regional and local roads throughout the country

    What does this mean for you:

    The Department of Finance has released the following figures to illustrate how the changes could affect different households:

    • A single person earning the minimum wage will have an increase of €208 per year due to this budget.
    • A retired person who receives the state pension, as well as an occupational pension of €15,000 per year, will see an increase of €247 per year.
    • A single parent with one 3-year old child who works in the public sector and earns €42,000 per annum will see a €521 increase in annual net income due to this budget.
    • A married couple, one of whom is self-employed and one of whom works in the home, with an annual combined income of €50,000 and three children aged 6,8 and 10 will see an increase in annual net income of €753 per year.
    • A single person who is self-employed earning an income of €60,000 will see an increase of €703 in annual net income
    • A married couple one of whom is self-employed and one of whom is employed with earnings of €50,000 and €40,000 respectively each paying pension contributions of 4.5% of gross income will see an increase of €855 in annual net income
    • A married couple with three children one of whom works part time and one of whom is employed with earnings of 6,500 and 40,000 respectively will see an increase of €303 in annual net income

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