THE IRISH GOVERNMENT’S Finance Team announced Ireland’s sixth austerity budget this afternoon.
Finance Minister Michael Noonan revealed how his department plans to increase the tax take to €1.1 billion in 2014, while Public Expenditure and Finance Minister Brendan Howlin explained how he plans to reduce spending by just under €2 billion.
Here are the main details from Michael Noonan’s speech:
-New Local Property Tax to be introduced on 1 July 2013;
-Exemptions will include: Any new or previously unoccupied homes purchased up to the end of 2016; First-time buyers in 2013; Those in unfinished estates for the next three years; Most of those exempt from Household Charge this year.
-The tax will be charged at 0.18 per cent of the market value for houses worth under €1 million;
-Houses valued at more than €1 million will be charged at 0.25 per cent of market value.
Other Property Measures
-Introduction of REITs (Real Estate Investment Trusts) to help NAMA offload its commercial property portfolio.
Cigarettes and Alcohol
-A bottle of wine will be more expensive from midnight because of a €1 rise in excise duty;
-Pints of beer and cider will jump by 10c;
-Excise duty on spirits will rise by 10c per standard measure;
-The duty on a packet of cigarettes will increase by 10c;
-Roll-your-own tobacco will increase by 50c per packet.
-The minimum level of annual contribution from the self-employed will be raised from €253 to €500;
-Unearned income – for example rent receivable, investment income, dividends and interest on deposits and savings – will be subject to PRSI from 2014;
-The PRSI-free allowance has been abolished meaning a loss of €264 per year for employees.
-From 2014, tax relief on pension contributions will only subsidise pension schemes under €60k per annum;
-The reduced rate of Universal Social Charge for those over 70 with an income of more than €60k will be discontinued from 1 January 2013;
-People with AVCs will be allowed to withdraw up to 30 per cent of their value at the individual’s marginal rate of tax.
Small Business and Jobs
-Noonan outlined the details of a 10 Point Tax Reform Plan which is designed to help the SME sector;
-The haulier industry will receive a rebate on diesel with effect from 1 July 2013;
-Approval for the CRO to extend its team of available reviewers to appeal credit decisions from lenders;
-VAT rate to remain at 9 per cent for the tourism industry.
-An extension of the 25 per cent rate and the special 100 per cent rate of stock relief until 2015;
-Introduction of a relief from capital gains tax arising on disposals of farm land for farm restructuring purposes.
-An extension of the Film Tax Relief Scheme to 2020;
-Reform of the same scheme to a tax-credit model in 2016.
-The excise duty on petrol is to remain unchanged;
-Vehicle Registration scheme to change to a dual-system so next years cars will be either 131s or 132s;
-The rates of both VRT and motor tax across all categories will increase with effect from the 1 January 2013.
-Carbon tax is to be extended to solid fuels on a phased basis over two years. A rate of €10 per tonne will apply from 1 May 2013 and increase to €20 the following year;
-Corporation tax is to remain unchanged;
-DIRT is to increase from 30 to 33 per cent;
-Capital Acquisitions Tax is to increase by 3 per cent to 33 per cent;
-The threshold to which Capital Acquisitions Tax applies is to be reduced by 10 per cent;
-From 1 July 2013, Maternity Benefit will be treated as taxable income but will be exempt from the USC.