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Budget 2017

11 October 2016

Last Updated: 11 October 2016

Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.

Personal Taxation
• Increase in the home carer tax credit from €1,000 to €1,100
• Rent a room relief increased from €12,000 to €14,000
• Mortgage interest relief extended to 2020

Business Taxation & Regulation
• Earned Income Credit increased from €550 to €950
• Allowable interest deduction for rental of residential property increased from 75% to 80%.

Relevant Contracts Tax and Construction Industry
• The Home Renovation Incentive (HRI) Scheme is being extended until 31 December 2018.

Indirect Taxes
• The 9% VAT rate is being retained.
• Farmer’s flat rate addition increased from 5.2% to 5.4%

Stamp duty
• No changes noted

Carbon Tax
• Fuel inputs to create high efficiency electricity now exempt from carbon tax.

Capital Taxes
• Capital Acquisitions Tax: Tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €280,000 to €310,000.

(Local) Property Tax
• No changes noted

Miscellaneous Provisions & Announcements
• Excise duty increase on tobacco 50c per 20 pack.
• Income tax rebate to assist first time buyers fund 20% deposit required by the Central Bank.
• The DIRT rate will be decreased by 2% each year for the four years until it reaches 33%.
• State pension will rise by €5 per week from March 2017, along with other weekly social welfare payments
• Excise duty on alcohol, petrol and diesel remains unchanged
• Sugar tax to be introduced in April 2018

Summary Statistics

Budget 2017 Budget 2016
Capital Gains Tax Rate 33% 33%
Capital Acquisitions Tax Rate 33% 33%
Income Tax Rates
Lower 20% 20%
Higher 40% 40%
DIRT Tax
39% (39% – where payments made less frequently than annually) 41% (41% – where payments made less frequently than annually)
Tax Credits
Single Person €1.650 €1,650
Married Couple €3,300 €3,300
PAYE Credit €1,650 €1,650
Earned Income Tax Credit €950 €550
Rate Bands
Single/widowed €33,800 €33,800
Single/widowed with dependent children €37,800 €37,800
Married -one income earner €42,800 €42,800
Married – two income earners €67,600 €67,600
PRSI
Contribution Ceiling No limit No limit
Universal Social Charge
< €13,000 Exempt Exempt
€ 0 – €12,012 0.5% 1%
€12,013 – €18,772 2.5%
€12,013 – €18,668 3%
€18,773 – €70,044 5%
€18,669 – €70,044 5.5%
€70,045 – €100,000 8% 8%
Self employed income > €100,000 11% 11%
PAYE income in excess of €100,000 8% 8%
Age >70/medical card holders with income < €60,000 – Max rate 2.5% 3%

Whilst every care has been taken in the production of this budget summary, neither Royal Canal Financial Control Services nor Ronan Duffy and Co. can be held responsible for any action taken or deferred, resulting from any errors contained therein. For a more comprehensive summary please refer to the government press release.

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