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2018 Budget: Some key points

Posted on October 10, 2017 by Browne & Murphy Solicitors

Property

  1. The level on stamp duty on commercial property transactions will increase from 2% to 6% from midnight.
  2. Reduction in the seven-year period for owners to get the full relief from Capital Gains Tax to four years. You may remember section 604A (introduced by Finance Act 2012) provided relief from Capital Gains Tax for a property acquired during the period from 7 December 2011 to 31 December 2014. The person who acquired the property had to continue to own the property for at least 7 years from the date they acquired the property to claim relief. The seven year period is now reduced to four year. Announcing the change, Minister for Finance Paschal Donohoe said  “In order to encourage owners of vacant residential property to bring that property into the rental market for a minimum of four years, I am introducing a new, time-limited deduction for pre-letting expenses”.
  3. The vacant site levy will increase from 3% in the first year to 7% in second and subsequent years.

Income

  1. The point at which an income earner attracts the higher rate of income tax is to rise next year by €750 per annum.
  2. Entry point for single earners to increase from €33,800 to €34,550.
  3. Entry point to USC to remain at €13,000.
  4. The 2.5% USC rate is to be reduced to 2% with the ceiling for the new rate increased from €18,772 to €19,372.
  5. The 5% USC rate reduced to 4.75%.
  6. The home carer credit will rise by €100 to €1,200.
  7. From last week of March, there will be a €5 per week increase in all weekly social welfare payments, including disability allowance, carer’s allowance, Jobseekers’ Allowance and State pension.
  8. Christmas bonus payment of 85% to be paid to all social welfare recipients in 2017.
  9. The threshold for the Family Income Supplement will rise by €10 per week for families with three children. €2 per week rise in the rate of the qualified child payment.
  10. There will be an increase of €2.50 in the Telephone Support Allowance for those receiving the Living Alone and Fuel allowances.

General

  1. The VAT rate on the tourism and services sector will remain.
  2. The minister announced measures for a new sugar tax in his Budget speech.  Tax of 30 cent per litre on drinks with over eight grams of sugar per 100ml will be introduced, along with a reduced rate of 20 cent per litre on drinks with between five and eight grams of sugar per 100 millilitres.
  3. The excise duty on a packet of 20 cigarettes will increase by 50 cents.
  4. There will be a reduction in prescription charges for all medical card holders under 70 from €2.50 to €2 per item. The monthly cap drops from €25 to €20, with the threshold for the Drugs Payment Scheme dropping from €144 to €134.
  5. There will be an additional 1,300 teaching posts next year to reduce the primary pupil teacher ratio to 26:1.
  6. There will be €1.7 billion invested in special education, with more than 1,000 new Special Needs Assistants being recruited before September 2018.
  7. 800 additional gardaí will be recruited during 2018.
  8. There will be €17 million for the Renewal Heat Incentive and to incentivise an increase in electric vehicles. There will also be a 0% Benefit-in-Kind rate for electric vehicles alongside the VRT relief and SEAI grant.
  9. The minister also announced an increase in the VAT rate on sunbed services from the reduced rate of 13.5% to the standard rate of 23%. In his budget speech he said: “This is in recognition of the clear evidence of a link between sunbeds and skin cancer, the most common form of cancer in Ireland”.

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