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Mortgage interest relief cut, welfare rates up €5, and a new sugar tax: The 10 important take-aways from Budget 2018

11 October 2017 15:47
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Mortgage interest relief cut, welfare rates up €5, and a new sugar tax: The 10 important take-aways from Budget 2018

The details have finally been confirmed: here are the key points from Paschal Donohoe's Budget 2018 speech

Tweaks to the tax band at which people begin paying a higher rate and a cut to two rates of USC is set to see the average worker round €250 better off each year. Meanwhile, stay at home parents are set to benefit by about €100 per year.

Meanwhile for PAYE workers threshold for the higher rate of income tax to applied raised by €750 from €33,800 to €34,550.

Mr Donohoe also announced that the 2.5pc USC rate is being reduced to 2pc and the 5pc USC rate is being dropped to 4.75pc.

He said the ceiling for the new 2pc rate is being raised from €18,772 to €19,372 to ensure that full-time workers won't be hit with a higher rate of USC, which would wipe out any gains.

Boom-time buyers who are benefiting from mortgage interest relief will now see that cut by 25pc this year as part of a phasing out plan.

The move has been criticised by some who argue that it may lead to more people being unable to pay their mortgage.

The tax relief will be reduced by 25pc every year for the next three years. It is expected the reduction will save the State €50m next year.

Noting that the Government is acutely aware of the housing crisis Minister Donohoe announced a number of measures to address the housing crisis.

Also read: Charlie Weston's top tips to Beat the Budget

The Government also plans to provide €750m in commercial lending for home builders, which will deliver up to 6,000 homes and help struggling small and medium-sized builders who cannot secure finance.

Some €1.83bn will be spend on housing in 2018. A total of 3,800 new social houses and apartments will be built by local authorities and approved housing bodies, and an additional €149m will be spent on the Housing Assistance Payment, which is paid by the State to landlords.

On vacant homes, owners will be able to claim tax relief of up to €5,000 to bring properties back into use for rent. The vacant site levy is being more than doubled from 3”pc to 7pc, and commercial stamp duty will rise from 2pc to 6pc by midnight tonight.

Buyers of residential land will be entitled to claim back the stamp duty, provided that development takes place within 30 months of the land being purchased.

In a blow for homeowners who bought between 2004 and 2012, Mortgage interest relief will be scrapped by 2020.

An additional €20 million allocation in 2018 towards an extension of the Pre-School programme, allowing children of pre-school age access to a full two-years of pre-school service.

During his budget speech in the Dail today, Mr Donoghue said the government was committed to “the development of affordable quality childcare with a focus on children, parents and providers.”

In addition, the capitation rate for providers of the ECCE Pre-school programme will increase by 7 per cent from September 2018. The ECCE scheme provides early childhood care and education for children of pre-school age, not older than 5 and a-half years of age.

All social welfare recipients including pensioners, job seekers and the disabled will get an extra €5 a week from the last week in March next year.

Also read: Murder victim's body may have been in Belfast flat for two years

Source: independent.ie

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