Ireland’s Budget 2025 was unveiled on 1st October 2024, with an overall package of €10.5 billion. The measures provided in the budget are a mixture of expenditure measures, tax policies as well as one –off provisions meant for addressing particular issues namely cost of living, housing and the costs of energy. Some of these changes will take immediate effect, while others will be implemented gradually over the course of the year 2025. Below are some of the Budget 2025 key announcements and how they will affect you.
Budget 2025 Key Announcements
Social Welfare
One of Budget 2025 key announcements was Social Welfare and key highlights include a series of once-off payments and increases to weekly social welfare rates.
- Double payments for certain long-term social welfare recipients.
- A €12 weekly increase for all social protection payments from January 2025.
- The Carer’s Allowance means test disregard will rise to €625 for a single person and €1,250 for a couple from July 2025.
- The Domiciliary Care Allowance will increase by €20 per month from January 2025.
- The Carer’s Support Grant will increase by €150, bringing it to €2,000 by June 2025.
- Double Child Benefit payments will be issued in both November and December 2024.
- €400 once-off payments for recipients of Disability Allowance, Invalidity Pension, and Carer’s Support Grant in November 2024.
- Expansion of the Free Travel Scheme to all people over 70 (September 2025).
Tax Changes
Other Budget 2025 key announcements include significant tax reforms, which play a crucial role in reducing the financial burden on both workers and businesses.
Income Tax and USC Changes
- The standard rate income tax band increases by €2,000 to €44,000 with proportionate increases for married couples and civil partners.
- Personal, employee, and earned income tax credits will increase by €125 each to €2,000.
- The Universal Social Charge (USC) 4% rate will reduce to 3%.
- The national minimum wage will increase by 80 cent to €13.50 per hour from 1 January 2025.
Capital Acquisitions Tax
Budget 2025 also increases the Capital Acquisition Tax (CAT) group thresholds, with Group A rising from €335,000 to €400,000, benefiting those inheriting property and other assets.
Housing and Renters
- The rent tax credit offered to tenants will rise from €750 to €1,000, and €2,000 for a jointly assessed couple.
- The Vacant Home Tax will increase to seven timers the Local Property Tax rate to incentivise property owners to bring vacant homes back into the market.
- The Help-to-Buy Scheme has been extended until 2029.
- 10,000 new social homes will be built.
- The Rent Tax Credit will rise to €1,000 for individuals and €2,000 for couples in private rented accommodation.
- A Stamp duty charged on properties over €1.5 million will increase to 6% and relief for pre-letting expenses for landlords has been extended until 2027.
Mortgage Interest Tax Credit
The Mortgage Interest Tax Credit will continue for 2024, providing a 20% relief on the increased interest homeowners pay on mortgages compared to 2022, capped at €1,250.
Education and Training
- Free Schoolbooks
- No fees for Junior and Senior Cycle students sitting State examinations in 2025.
- A €1,000 reduction in the student contribution fee for the 20254/2025 academic year.
- Expansion of the Hot School Meals Programme to all primary schools.
- Free public transport to be extended to children aged five to eight.
Support for Businesses
- The introduction of a €4,000 Power Up Grant for the hospitality and retail sectors aims to alleviate electricity costs before Christmas.
- VAT registration thresholds will increase to €85,000 for goods and €42,500 for services, reducing financial strain on small businesses.
- Farming tax reliefs.
- Increase in income tax bands and tax credits.
- Small businesses investors can benefit from new entrepreneur relief, with the limit on capital gains tax (CGT) relief increased to €10 million.
Transport
- Increased capacity for existing public transport routes.
- Expansion of cycling and walking infrastructure.
- Greenway expansions and road safety measures.
- New incentives for Low Emission Vehicles.
Health
- 335 new hospital beds and 160 community beds to boost capacity.
- 49 new consultants posts and expanded training places for GPs and nurses.
- Launch of free Hormone Replacement Therapy (HRT) for women experiencing menopause symptoms.
- Expansion of free HSE Assisted Human Reproduction services, increasing access to IVF treatments.
- Increase in numbers working in health service.
Energy and Environment
- €250 Electricity Credit: All domestic electricity customers will receive €250 off their bills in two instalments- one before the end of 2024 and the second in 2025.
- Carbon Tax increase.
- VAT reductions.
Justice and Service
- Recruitment of 1,000 additional Gardaí and 150 civilian staff.
- €9 million allocated for criminal legal aid.
- Funding for 150 new prison staff.
- €7.9 million for domestic, sexual, and gender-based violence prevention.
- €1.35 billion allocated to the Defence Forces.
While Budget 2025 introduces a range of significant changes across social welfare, taxation, housing, and more, it’s crucial to understand how these measures will impact your personal financial situation. Navigating these updates can be complex, and seeking professional advice can help you make informed decisions. At Fairstone, we provide expert financial advice tailored to your needs, ensuring that you are well-prepared to take full advantage of the opportunities presented in the latest budget. Whether you’re planning for the future or managing your current finances, we’re here to guide you every step of the way.
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Source: Gov.ie
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