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Top Highlights From 2024 Budget

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The 2024 Budget Day is Tuesday, the 10th of October.

Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe will begin outlining the full Budget in a Dáil speech from 1pm.

Our qualified Tax Experts here at Tax Return Plus will be comprehensively reviewing the 2024 Budget announcements and their implications for our clients.

The Budget 2024 is aimed at tackling the impact of inflation and improving living standards. The total cost of the budget is 14 billion euros, with core spending worth €6.4 billion, €1.1 billion of which includes taxation measures. While several important benefits are being announced, we will focus on providing updates that affect you as Landlords, Homeowners, and self-employed individuals.

So let’s dive in…

 

Tax Break For Small Landlords

Budget 2024 also brings a sizeable tax relief of €600 in 2024 rising to €1000 in 2026 for small landlords in order to incentivise them to remain in the rental market. Landlords who wish to avail of this relief will have to remain in the rental market for four years.

Rental income of €3,000 will be disregarded at standard rates in 2024 – €4,000 in 2025, and €5,000 from 2026 and 2027.

 

Budget 2024 Highlights for Tax Payers

  • The standard rate of income tax cut off point for the 40% tax band is to be increased, bringing the entry point from €40,000 to €42,000.
  • The Rent Relief Tax Credit will increase from €500 to €750 for single taxpayers and €1250 to €1,500 for married couples.
  • The upper rate of the second USC band is to be increased from €22,920 to €25,760.
  • There will be the first reduction in USC rates in 5 years, with the 3rd band rate reducing from 4.5% to 4%.
  • A one year 20% mortgage interest tax break relief will be given due to the increased interest paid on mortgages between 2022-2023.
  • The Help-to-Buy-Scheme will be extended till the end of 2025.
  • €100 increases in both the Personal Tax Credit and the Home Carer Credit.
  • €200 increase in the Incapacitated Child Carer Credit.

 

Income Tax

The Budget has announcement a change to the income tax band rates, with an increase in the standard rate income tax cut-off point by €2000.

From January, there will be a widening of rate bands for the 40% top rate of income tax by €2,000, changing from €40,000 to €42,000. This will mean an extra €400 in tax savings for people paying the 40% tax rate.

 

Universal Social Charge (USC)

USC is a tax payable on your total income. Depending on your circumstances, you pay USC at the standard rate or the reduced rate.

Among the 2024 Budget announcements, the 4.5% USC rate will be reduced to 4%, meaning there will be tax savings for those earning over €36,000 by €122. There will also be an increase in the second USC band rate from €22,920 to €25,760.

 

So from January, USC will be calculated as:

  • Income up to €12,012 will pay USC at a 0.5% rate
  • Income from €12,013 – €25,760 will pay USC at a 2% rate
  • Income from €25,760 – €70,044 will pay USC at 4%
  • Income over €70,045 will be taxed for USC at a rate of 8%
  • And those self-employed earning over €100,000 will be hit with a 3% surcharge

 

There will also be an extension on the USC concession for a further 2 years.

This is the first reduction in USC rates in 5 years.

 

Personal Tax Credit

Also announced in the budget are changes to personal tax credits. An increase of €100 on the Employee PAYE credits from €1775 to €1875 will allow for a tax saving of €200.

 

Rent Tax Relief

The Rent Tax Credit for private tenants who are not in receipt of other state housing supports will be increased from €500 for a single person to €750, and €1,500 for married couples who are renting. This will mean many renters will experience further tax savings of €250 or €500 in 2024.

Parents with students in education could always claim the rent tax relief, but now, the 2024 announcement will allow for student children who have tenancies in ‘Rent a Room’ or ‘digs’ accommodation to claim the Rent Tax Credit for 2022/2023.

The Rent Tax Credit was reintroduced into the 2023 Budget and will be applicable for the years 2022-2025.

 

Capital Gains Tax

The reduced CGT of 10% (previously 33%) which applies to Entrepreneur Relief has been extended to include Angel Investors.

 

Changes to VAT

The Budget 2024 announced an increase in the point of entry to charge VAT on turnover from €37,500 to €40,000 for services and from €75,000 to €80,000 for the sale of goods.

 

Corporation Tax

The Budget 2024 announced an increase in Corporation Tax to 15% for large multinationals.

 

Additional Points of Interest From the 2024 Budget

  1. An energy credit worth €450 in total will be paid to every household in three instalments as part of cost-of-living measures.
  2. A €250m scheme for business support is set to be established.
  3. School books are set to be free for the first three years of secondary school, costing €55 million euro.
  4. VRT relief for electric vehicles being extended to 2025.
  5. Research and Development Tax Credit is being increased from 25% to 30%.

 

Need Some Help With Your Tax Return?

The deadline for income tax returns in Ireland is the 31st of October 2023. You must settle both your tax return and all payments from the previous year by that date. If you require assistance filing your tax return, please request a quote from Tax Return Plus and one of our team of tax experts will be in touch.

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