Sunday, 29 October 2017 13:06

Ireland - budget 2018

The Irish Government announced the Budget 2018 on the 10th of October 2017, with some changes in critical areas like taxation and social welfare.

The standard rate income tax band for all earners, for example, is increasing by €750. This means an increase from €33,800 to €34,550 for single individuals and from €42,800 to €43,550 for married one-earner couples (January 2018). 

Mortgage interest relief is being extended for remaining recipients (owner occupiers who took out qualifying mortgages between 2004 and 2012) on a tapered basis. 75% of the existing 2017 relief will be continued into 2018, 50% into 2019 and 25% into 2020. The relief will cease entirely from 2021.

The Government has modified also the taxation related to the Universal Social Charge; incomes of €13,000 or less will continue to be exempt from USC in 2018. Once the income is over this limit, the rate of USC will be as follow: 

  • €0 to €12,012 @ 0.5%
  • €12,012 to €19,372 @ 2%
  • €19,372 to €70,044 @ 4.75%
  • €70,044+ @ 8%

The debate in preparation of the Budget 2018 was focus more on the social housing. The public opinion considers the lack of home as one of the major problem the government has to solve. In the budget 2018, an increase of €31 million has been allocated to the Social Housing Current Expenditure Programme, bringing the total to €115 million. Local authorities and approved housing bodies are to build approximately 3,800 new social houses in 2018. Moreover, from 2019, an extra €500 million will be provided for the direct building programme, to build an additional 3,000 social houses by 2021.
In order to solve the problem, the government has also decided to increase the Housing Assistance Payment (HAP) scheme by €149 million to €301 million. This will provide for an additional 17,000 households to be accommodated under HAP in 2018 and support the nationwide rollout of the HAP Place Finder Service for people who are in emergency accommodation. Funding of €134 million is allocated to the Rental Accommodation Scheme (RAS) to provide for an additional 600 new transfers under the scheme, as well as the ongoing cost of households already supported under RAS.

Some measurements were decided by the Government with effect to the day to day life. The budget 2018, for example, increases the excise duty on a packet of 20 cigarettes by 50 cents (including VAT) with a pro-rata increase on other tobacco products and an additional 25 cents on roll-your-own tobacco. This took effect from midnight on 10th October 2017. Furthermore, on 1st April 2018, it will be introduced a tax on sugar sweetened. The tax will apply to sugar sweetened drinks with a sugar content between 5 grams and 8 grams per 100ml at a rate of 20c per litre. A second rate will apply for drinks with a sugar content of 8 grams or above at 30c per litre.

 

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