General:

• Minister Chambers noted that the Irish economy is in relatively good shape, with unemployment projected to remain at c. 4.5% and inflation now down at c. 2% (from c. 10% in recent times). The Minister is forecasting the economy to grow by 2.75% in 2024 and close to 3% in 2025.

• Minister Chambers noted that Tax revenue is expected to reach €105.7 billion this year. A cost of living package of €2.2 billion was announced and a further €1.25 billion will be made available to the Land Development Agency. The €3 billion from the AIB share sale is earmarked to go towards infrastructure spending.

• The minimum wage will increase to €13.50 per hour.

  Personal Finance:

• For Income Tax, the Standard Rate cut-off point has been increased by €2,000 to €44,000 p.a. The main tax credits (Personal, PAYE and Earned Income) will be increased by €125 each. The 4% USC rate is being reduced to 3%.

• The State Pension, and welfare payments, will be increased by €12 per week. The full Contributory State Pension will increase from €277.30 per week to €289.30 per week from January 2025.

• Inheritance Tax thresholds are increasing. Group A (Parent to Child) will move from €335,000 to €400,000. Group B will move from €32,500 to €40,000 and Group C from €16,250 to €20,000.

• Pensions: We know from an announcement last week that the €2m Standard Fund Threshold will be increased by €200,000 from 2026 through to 2029, until it reaches €2.8m. No more detail was noted on this.

• There was no mention of any changes to tax relief available for making pension contributions, both in terms of personal tax relief and the funding opportunity of Employer contributions to PRSAs.

• The upper age limit on Retirement Relief has been continued to age 70. Disposals by children of over €10m after 12 years will be subject to clawback.

• The maximum investment in EII Schemes has been increased from €500,000 to €1m.

• The 9% reduced VAT rate for gas and electricity will be extended for another 6 months.

  SMEs:

• The Small Benefit exemption (for remunerating employees with vouchers) will increase from €1,000 to €1,500

• The Pensions auto-enrolment scheme is set to begin on 30 September 2025. This had been due to start in January 2025.

• The VAT registration limits have increased from €40,000 (Services) and €80,000 (Goods) to €42,500 and €85,000 respectively.

  Property & Land:

• In a surprise development, 6% Stamp Duty on Residential Properties above €1.5m will take effect from midnight. 1% will continue to apply up to €1m, with 2% applying between €1m & €1.5m.

• Residential Zoned Land Tax (RZLT) has been extended. The Help to Buy Scheme is also extended until the end of 2029.

• The annual Rent Tax Credit is being increased to €1,000 per person for 2024 & 2025.

• Mortgage Interest Tax Relief for homeowners is extended for one more year.

• The relief on pre-letting expenses for landlords is being increased for 3 more years.

Please note that the above points are summary only and should not be fully relied upon.