Budget 2025 – Tuesday 1st October 2024.
A summary of the main Budget 2025 announcements is given below.
Income Tax Cuts in Budget 2025
The level at which the 40 per cent tax rate kicks in is to be raised from €42,000 to €44,000.
There will be increases in tax credits as follows:
- €125 personal tax credit
- €150 home carer tax credit
- €150 single person child carer tax credit
- €300 incapacitated child tax credit
- €300 blind person’s tax credit
USC Rates
There will be a reduction on the 4% USC levied on income from €25,760 to €70,044, bringing that rate down to 3 per cent.
The ceiling for the 2 per cent band of USC is also expected to rise by €1,622 to €27,382
Childcare
Increases to Welfare and Pensions
There will be a permanent increase to weekly welfare and pension payments of €12 per week from January 2025.
The maximum rate of all weekly social welfare payments will increase by €12 with proportional increases for qualified adults and people on reduced rates of payment (From January 1st 2025).
The Qualified Child Payment will be renamed as the Child Support Payment – and weekly payments for under 12s will be increased by €4 to €50 and for over 12s increased by €8 to €62.
There will be a €20 increase in the Domiciliary Care Allowance
The introduction of Jobseeker’s Pay-Related Benefit will start from 31 March 2025. Under the scheme, a person will get a jobseeker’s payment rate linked to their previous employment income.
There will be a double welfare payment in October on top of the usual Christmas Bonus .
Child Benefit
Double Month
There will be two a double child benefit payments that will be paid in November and December. (Extra €140 per child)
Parents of newborn babies are expected to receive a triple child benefit payment upon the birth of their child from January 1st 2025. The proposed “baby boost” payment will mean a special one-off payment of €420 paid out following the birth of a newborn.
Other Welfare One Off Bonuses
There will be some one-off lump sum payments before the end of 2024 , including:
- 400 disability support grant
- €400 carers support grant
- €300 fuel allowance payment
- €200 living alone allowance
- €400 working family payment
- €100 per child payment for those in receipt of the qualified child increase payment
Payment Dates to be confirmed
The annual Christmas Bonus for long-term welfare recipients and pensions is to be paid in December 2024 at 100% again this year.
Cost of Living Bonus : There will be another double payment for all long term weekly welfare schemes and state pensions in October 2024 . (Same people who get the Christmas Bonus)
Electricity Credits
There will be two energy credits of €125 each, paid to households this winter. One before the end of 2024 and one in early 2025.
Mortgage Interest Relief
The one-year mortgage interest relief scheme introduced last year is set to be extended for another year,
Housing
The current rent tax credit is to be increased from €750 to €1000 for 2024 and 2025
The Help to Buy scheme will be extended until the end of 2029
The Mortgage Interest Tax Credit for 2023 has been extended for 2024. This tax credit is for homeowners who had an outstanding mortgage balance of between €80,000 and €500,000 on their primary home on 31 December 2022.
Higher stamp duty for bulk purchasers of homes will rise from 10 per cent to 15 per cent with immediate effect.
A new “mansion tax” of six per cent stamp duty will come in at midnight on properties worth €1.5 million or more.
The vacant homes tax will increase from five to seven times a property’s property tax rate from November
Education
Student Grants
A 15 per cent across-the-board increase on student grants is also expected, while the Government is expected to up the special rate of maintenance threshold from €26,200 to €27,400 in line with social welfare increases. (September 2025.)
The €1,000 reduction in college registration fees will continue for another year.
School transport fees to remain reduced .
Extenson of the Hot School Meals programme to all primary schools in 2025.
The free schoolbooks scheme will be extended to Senior Cycle students from September 2025.
There will be no fees for Junior Cycle and Senior Cycle State examinations in 2025.
Minimum Wage
As expected the minimum wage will go up in January to €13.50.
Carbon Tax
Carbon tax increases ,as already expected, will take place from Oct 2024
Carbon tax rate increases on petrol and auto-diesel are legislated to occur on 9 October 2024 when the rate of carbon tax will increase from €56 to €63.50 per tonne of carbon dioxide emitted. This will add 2.1 cent per litre of petrol and 2.5 cent per litre of auto diesel, VAT inclusive.
Carbon tax increases are implemented annually under the 10-year carbon tax trajectory that was introduced in Finance Act 2020. . This increase will be applied to all other fuels from 1 May 2025.
Cigarettes
€1 on a packet of cigarettes, up to €18.05 for a pack of 20
Vapes
A new tax an vapes of 50c per ml of eliquid in the electronic devices. We estimates that a typical disposable vape costing €8 would end up costing about €9.25
VAT
Reduced VAT of 9% on energy will be extended by another 6 months to the end of April 2025
VAT on heat pumps will come down from 23% to 9%
VAT registration thresholds will increase to €85,000 for goods and €42,500 for services from 1 January 2025.
Inheritance Tax
Inheritance tax thresholds are expected to increase :
The group A category for tax-free sums inherited by children from their parents will go up from €335,000 to €400,000;
Group B, covering grandchildren, siblings, nieces and nephews will go up from €32,500 to €40,000;
Group C covering other relationships will rise from €16,250 to €20,000.
Public Transport
Free public transport for children aged under 9
Free “companion pass” for over-70s on public transport from Sept 2025