Minister for Finance Michael Noonan addressed the Dáil at 1pm to deliver his budget 2017 speech, his sixth budget introduced since 2011.
We will be looking at and debating some of the key points on two budget specials – first on The Way It Is between 6pm and 7pm in a special in-studio programme with John Purcell and gets while on Wednesday morning we’ll be live for KCLR Live from the Citizens Information centre in Kilkenny between 10am and 12pm, both with thanks to O’Neill Foley.
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Budget 2017 contains approximately €500m worth of tax cuts from its €1.3bn total package, with the budget favouring an increase in expenditure rather than reducing revenue by a rate of 3:1.
Small Business
- Start your own business scheme has been extended by two years
- New SME share based incentive scheme to be introduced in 2018
Tourism & Hospitality
- Reduced rate of VAT at 9% being retained for the moment
Farming
- Farm restructuring relief to be extended to the end of 2019
Taxation
- Reduction of the 20% rate for Capital Gains Tax to 10% on disposals of qualifying assets up to a limit of €1m in chargeable gains
- Income tax credit for fishermen with an annual credit of €1,270
- €335m allocated to help lower and middle income earners. USC to be reduced by 0.5% across the board in the three lower bands. Full time workers on minimum wage will remain outside the top rate of USC.
- DIRT tax being reduced by 2% per year for the next four years to help savers.
- Earned income tax credit up €400 to €950 helping an estimated 147,000 self employed workers.
- Ireland’s 12.5% Corporation Tax rate will not be changed
- VRT relief for hybrid cars being extended by another 2 years; VRT relief on electric cars extended for 5 years.
- Incentives introduced for greener fuels
- Category A threshold of Inheritance Tax increasing to €310,000 (up €30,000); Category B and C thresholds increase by 8%.
- 50c price increase on 20 cigarettes; putting 20 cigarettes around €11 per pack. Pro-rata increase for other tobacco products. Worth noting that Michael Noonan mentions this is the only tax increase listed in Budget 2017.
- “Sugar tax” set to be introduced in 2018 in line with other countries placing a tax on sugar enhanced drinks and soft drinks.
Housing
- Help To Buy scheme to be introduced for first time buyers of new build homes – rebate of income tax paid over previous 4 tax years up to maximum 5% of purchase of house up to maximum price of €400,000. No rebates on house prices in excess of €600,000. Pro-rata rates apply to lower priced houses.
- Second hand properties will not be included in the Help To Buy scheme.
- Home Renovation Incentive scheme being extended by 2 years to the end of 2018
- Home carers credit to be increased by €100 to €1,100.
- €1.2bn allocated in funding for housing to Dept. of Housing, Planning, Community & Local Government for 2017.
- Housing Assistance Payment Scheme gets a budget increase of €105m to €153m, opening up scheme to an additional 15,000 households
Health & Home Care
- Health spending up nearly €500m to €14.6bn
- Home carers credit up €100 to €1,100
- Prescription charges for over 70s reduced from €25 to €20 from March 2017.
- Medical Card coverage extended to all children in receipt of Domiciliary Care Allowance (DCA)
Education
- €458m added to education spending to help recruit for 2,400 teaching posts
Child Care
- Single affordable childcare scheme rolling out in September 2017
- Additional €86m going into Early Childhood Care & Education scheme
Pension & Social Welfare
- State Pension going up €5 per week since March 2017
- €301m additional funding for social welfare payments
- All weekly social welfare payments (carers, disability, jobseekers) will rise by €5 per week in March, subject to passage of Social Welfare Bill
- 85% Christmas bonus for Social Welfare recipients in 2017
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