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Budget tax package includes USC cut

The Minister for Finance has told the Dáil that a framework for spending the €14 billion the State will receive in back taxes from Apple will be brought to Government in the first quarter of next year.

Delivering his Budget 2025 speech, Jack Chambers said that it was important that this revenue was not used for day-to-day spending or narrowing the tax base.

He said that Government believed that the once-off revenue should be used to address “known challenges” in housing, energy, water, and transport infrastructure.

Tax measures

For 2025, the minister announced a package totalling €10.5 billion, comprising €6.9 billion of spending, €1.4 billion of tax measures, and a cost-of-living package of €2.2 billion. Totals spending will rise by 6.9%.

The main personal-tax measures include a cut in the main USC rate from 4% to 3%, and a €125 increase in the main tax credits. The standard-rate cut-off point goes up by €2,000 to €44,000.

The national minimum wage will increase by 80 cent an hour to €13.50 an hour on 1 January 2025.

Cost-of-living measures announced by Paschal Donohoe (Minister for Public Expenditure, NDP Development and Reform) include two €125 credits – one before Christmas and one after – to help households with energy bills.

There will also be an October bonus payment for long-term recipients of social-welfare payments, and two double child-benefit payments (November and December).

The amount allocated to the Department of Justice has been increased to just over €3.9 billion.

Help to Buy extended

Among the property measures are a €250 increase in the rent tax credit and a five-year extension of the Help to Buy scheme.

A measure announced in Budget 2024 to provide relief for mortgage holders who experienced increased interest rates in 2023 will be extended for a year.

To discourage significant purchases of houses by investment funds, the higher rate of stamp duty on bulk acquisitions of houses will go up from 10% to 15% with immediate effect.

The rate of stamp duty on residential property valued above €1.5 million will be increased to 6%, with effect from tonight.

The minister has also increased the rate of vacant-homes tax from five times to seven times the property’s existing base LPT (local property tax) rate. This will take effect from November.

Tax relief for listings

On business tax, Minister Chambers announced that the Government would bring in a 'participation exemption' for foreign dividends from 1 January. This is aimed at providing an alternative, simplified mechanism for double-tax relief for multi-national businesses.

Three measures aimed at helping early-stage businesses to attract funding have been extended until the end of 2026, while the capital-gains tax (CGT) relief targeted at investors in innovative start-ups will be changed to provide for an increased lifetime limit on gains from €3 million to €10 million.

There will be a new tax relief for expenses incurred in connection with a company’s first listing on an Irish or European stock exchange, subject to a cap of €1 million.

The VAT registration thresholds that apply for the supply of goods and services, which are currently €80,000 and €40,000 respectively, will rise to €85,000 and €42,500, respectively.

A new domestic tax on e-cigarettes, to be introduced in the middle of next year, will apply to all e-liquids at a rate of 50c per ml of e-liquid.